|Wright Medical CEO Robert Palmisano|
Wright Medical ($WMGI) has agreed to ship its hip and knee implants business to MicroPort Medical, cashing out for $290 million and planning to focus on extremities and biologics.
Under the deal, MicroPort gets Wright's OrthoRecon segment, which hauled in about $269 million last year through sales of hip and knee reconstruction implants. Wright expects the deal to close by year's end, and the Tennessee devicemaker plans to buckle down on its fast-growing foot-and-ankle business, CEO Robert Palmisano said.
"This next step in our transformation should enable both businesses to flourish as separate, global companies focused in their unique market space with strong management teams that will position them for continued success," Palmisano said in a statement. "In my experience, companies are bought, not sold, and such was the case in this transaction, as there were several suitors for this very valuable business."
Last year, Wright's extremities business posted $214 million in sales, and the company expects up to 12% growth in 2013. Selling off OrthoRecon will also allow Wright to invest in its growing biologics implant offerings, Palmisano said. In March, Wright closed a $190 million deal for regenerative medicine company BioMimetic Therapeutics, acquiring the Augment bone graft, which is awaiting FDA approval.
Wright's divestiture follows years of shakeups and restructuring, and the company has shuffled execs in and out since its 2010 admission that it violated federal anti-kickback laws. Wright finally completed its deferred prosecution agreement last fall, eventually splitting up its business units to isolate the slumping hip-and-knee segment from its promising foot-and-ankle operation.
- read the announcement
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