Smith & Nephew Plc Agrees $1.7 Billion Acquisition

Smith & Nephew plc (LON: SN) announces the purchase of ArthroCare for $48 a share.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

smith & nephew

The shares of Smith & Nephew (LSE: SN) (NYSE: SNN.US) added 13p to 889p during early trade this morning after the medical technology firm announced a $1.7 billion acquisition.

The FTSE 100 member confirmed the acquisition of AthroCare (NASDAQOTH: ARTC.US) would add approximately $85m to annual trading profits in the third full year.

One-off expenses involved in the deal are expected to be around $100m over a three-year period.

AthroCare provides specialist medical equipment to aid both staff and patients in hospitals across the world. Smith & Nephew’s agreement involves paying $48 per share, which compares to a $45 closing price seen on Friday. During the first three quarters of 2013, ArthroCare reported sales up 2% to $276m.

Olivier Bohuon, Smith & Nephew’s chief executive, said:

“This is a compelling opportunity to add ArthroCare’s technology and highly complementary products to further strengthen our sports medicine business.”

“Together, we will be able to generate significant additional revenue from the more comprehensive portfolio, combined sales force and Smith & Nephew’s global footprint.”

Mr Bohuon is optimistic that ArthroCare’s strengths in knee repairs and shoulder anchor innovations will help drive Smith & Nephew to higher growth.

Mr Fitzgerald, chief executive officer of ArthroCare, said:

The board believes that this transaction is in the best interest of our shareholders.

Of course, whether today’s acquisition statement as well as the wider prospects for the healthcare sector both combine to make Smith & Nephew a ‘buy’ right now is something only you can decide.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Douglas does not own any share mentioned in this article. 

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »