Medtronic has moved to acquire Mazor Robotics, a developer of spine surgery guidance systems, and plans to merge it with its own implants, navigation and imaging products to offer an integrated suite of surgical offerings.
The medtech giant plans to acquire all outstanding shares of Mazor for $58.50 per American Depository Share, or $29.25 per ordinary share, in a deal that totals about $1.64 billion. All told, Medtronic will pay about $1.3 billion after subtracting the costs of its previous investment in the company, plus any cash on hand from Mazor.
The boards of directors of both companies have approved the transaction, and the deal is expected to close by the end of Medtronic's third fiscal quarter, ending Jan. 25, 2019, subject to regulatory clearances and approval by Mazor's shareholders.
"We believe robotic-assisted procedures are the future of spine surgery, enhancing surgeons' abilities to perform complex procedures with greater precision, consistency and control,” said Geoff Martha, president of the medtech giant’s Restorative Therapies Group, which expects the acquisition to generate double-digit returns on investment within the next four years and increasing contributions thereafter.
“Medtronic is committed to accelerating the adoption of robotic-assisted surgery and transforming spine care through procedural solutions that integrate implants, biologics and enabling technologies,” Martha added and said the company plans to maintain Mazor’s site and team in Caesarea, Israel.
This purchase is the culmination of a relationship that began in May 2016, with a phased investment agreement between Medtronic and Mazor, which was founded in 2001.
Then in August 2017, Medtronic expanded the partnership in a $40 million deal to become the exclusive worldwide distributor of the company’s Mazor X surgical assistance platform, which offers 3D planning and verification during the procedure.
In December of that year, it was revealed that Mazor CEO Ori Hadomi had become the subject of an insider trading investigation by the Israel Securities Authority, following allegations related to the Medtronic distribution deal.