Big Moves In Orthopedics: Enovis Seals €800M Deal To Acquire LimaCorporate

Enovis Corp ENOV inked a deal to acquire LimaCorporate S.p.A. for an enterprise value of approximately €800 million (around $850 million).

The acquisition amount includes cash consideration of €700 million and €100 million in Enovis common shares.

LimaCorporate is a private global orthopedic company focused on restoring motion via a portfolio of implant solutions.

The buyout will create around $1 billion revenue reconstruction business, with approximately 50% of revenues coming from the emerging extremities markets.

The acquisition will expand ENOV's international presence and boost the customer base and product mix.

The buyout will also add a complementary portfolio of efficient surgical solutions and technologies, which includes 3D printed Trabecular Titanium and a comprehensive revision offering.

The transaction will ensure robust cross-selling opportunities and cost synergies of around $40 million to be realized by year three after acquisition closure.

Guidance: The company expects Lima to generate sales of $290 million-$300 million and adjusted EBITDA of $70 million-$75 million in 2024. 

The transaction is expected to be completed in early FY24, subject to regulatory approvals and customary closing conditions.

The deal supports Enovis' long-term goals of high-single-digit organic revenue growth and sustainable EBITDA margin expansion.

The company reiterates previously announced FY23 guidance, which includes organic sales growth of 7%-7.5%, adjusted EBITDA of $262 million-$270 million, and adjusted EPS of $2.22-$2.36. 

The company expects the acquisition to be neutral to slightly accretive to FY24 adjusted earnings per share and accretive in FY25 and beyond.

Enovis plans to finance the cash portion of the consideration through a combination of cash on hand, availability under its existing revolving credit facility, and committed financing. As of June 30, 2023, ENOV cash and cash equivalent stood at $32.5 million. 

Price Action: ENOV shares closed lower by 0.44% at $51.65 on Friday.