Source: Bone Future; Editor: Jacky
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On September 25, 2023, Enovis Corporation (NYSE: ENOV), an innovative medical technology company, announced that it had reached a definitive agreement to acquire LimaCorporate, a leading player in the orthopedic joint industry.
# Enovis Reaches Acquisition Agreement with Lima
The enterprise value of this acquisition is approximately 800 million euros (about 6.2 billion RMB), including 700 million euros in cash paid at closing and 100 million euros in Enovis common stock.Lima Corporate, established in 1945, is a global orthopedic company with diversified revenue and has experienced significant growth with a high compound annual growth rate over the past decade. Since 2000, Lima Corporate has focused on orthopedic business and evolved into a globally leading orthopedic enterprise, emphasizing digital innovation and customized hardware solutions. It ranks among the top ten joint device companies and has expanded its presence in the joint sector by acquiring certain regional businesses of Zimmer Biomet’s knee and elbow systems. Lima Corporate's pioneering technological solutions aim to enhance surgeons' capabilities and improve patient outcomes following joint replacement surgeries.The addition of Lima will bring several compelling strategic advantages to Enovis:- Increase reconstruction business revenue by approximately USD 1 billion, with about 50% of the revenue coming from the rapidly growing extremity orthopedics market;
- Expand international development scale through complementary global customer bases and product portfolios;
- By improving efficiency through the most advanced manufacturing facilities and a strong innovation engine;
- Expand the portfolio of complementary products with proven surgical solutions and technologies, including 3D-printed trabecular titanium and a comprehensive range of revision products;
- Create strong cross-selling opportunities and approximately $40 million in cost synergies, fully realizing this goal through supply chain optimization and cost integration by the third year after the transaction closes;
- Support Enovis' long-term goals of high organic revenue growth and sustainable EBITDA margin expansion.
Enovis Chairman and CEO Matt Trerotola said that he believes the acquisition of Lima Corporate will enable the company to consolidate its strong growth momentum and global leadership in the orthopedic solutions field, creating immediate and sustainable value for patients, customers, employees, and shareholders. With Lima’s complementary surgical solutions and customer base, the company will have the opportunity to expand its high-value product portfolio and further grow its global business. Additionally, this acquisition will allow Enovis to enhance financial performance through significant cross-selling revenue growth opportunities and cost synergies.Lima CEO Massimo Calafiore stated that merging these two leading orthopedic companies into a global platform creates a significant growth opportunity to leverage the strengths of Enovis and Lima in developing patient-customized devices and orthopedic products. The company looks forward to collaborating with the Enovis team for continued success.
# About Transaction Details
This €800 million transaction in the acquisition includes €700 million in cash paid at closing and €100 million in Enovis common stock expected to be issued within 18 months after closing. Enovis plans to fund the cash portion of the consideration through cash on hand, available cash under its existing revolving credit facility, and committed financing from UBS Investment Bank and J.P. Morgan Securities LLC.The company expects Lima to generate sales of $290 million to $300 million and adjusted EBITDA of $70 million to $75 million by 2024.The transaction is expected to be completed in early 2024, subject to applicable regulatory approvals and customary closing conditions.Enovis Reaffirms Full-Year 2023 Financial Guidance with Organic Sales Growth Expected at 7-7.5%, Adjusted EBITDA of $262-$270 Million, and Adjusted Diluted EPS of $2.22-$2.36. The Company Anticipates the Acquisition Will Drive Moderate to Slight Growth in 2024 Adjusted EPS, with Continued Growth into 2025 and Beyond.
# About LimaCorporate
LimaCorporate (Lima Medical) is a globally leading orthopedic company headquartered in Italy, specializing in digital innovation and customized hardware. It is committed to orthopedic digital innovation and customer-tailored prostheses, promoting the development of patient-centered clinical solutions. Lima is one of the top ten foreign orthopedic device enterprises.Lima Corporate is dedicated to providing orthopedic implant products, aiming to address medical challenges alongside clinical orthopedic surgeons through its implant manufacturing technology and products, thereby improving patients' quality of life. The orthopedic products offered by Lima Corporate include joint implants and a comprehensive portfolio of extremity implants, with its core implant manufacturing technology being Trabecular Titanium technology.
# About Enovis
Enovis Corporation is an innovation-driven medical technology growth company dedicated to developing clinically differentiated solutions that significantly improve patient outcomes and optimize workflows. With a corporate culture rooted in continuous improvement, global talent, and innovation, Enovis offers a broad portfolio of products, services, and integrated technologies that empower patients in orthopedics and beyond to regain active lifestyles.Enovis Corporation was formerly known as Colfax Corporation. In 1995, Enovis Corporation was renamed Colfax Corporation, founded by Steven and Mitchell Rales, the two brothers who previously created Danaher Corporation. Steven and Mitchell transformed Danaher from a group of discrete manufacturing enterprises into a leading technological innovator with a market value exceeding 100 billion US dollars.By adopting this successful approach, the Colfax team embarked on a journey to build a world-class global enterprise by acquiring outstanding companies, then improving and expanding them into excellent businesses. Their first acquisitions, including IMO Industries, Inc. and Allweiler AG, together formed a high-performance pump company named Colfax Fluid Handling.Colfax has developed the Colfax Business System (CBS) as its operating model by adopting proven continuous improvement principles based on the Danaher Business System and the Toyota Production System. CBS has become the foundation of Colfax's culture, laying the groundwork for rapid growth over the following decades.In 2000, Colfax prepared for significant expansion, achieving this through growth and complementary acquisitions.In early 2012, Colfax became a diversified industrial company through the acquisition of Charter International plc. Charter brought two world-class global franchises to Colfax - ESAB and Howden - and created a multi-platform enterprise that provides solutions to customers around the world.By 2015, Colfax's revenue had grown significantly to over $3 billion (less than $250 million in 2000), and Matthew Trerotola was appointed as CEO. Mr. Trerotola continues to serve as CEO today. The company also solidified its corporate capabilities through robust talent processes, a strong business system, and a disciplined acquisition engine. This dynamic combination drove improvements in profitability and growth between 2015 and 2019 and was the driving force behind the addition of 15 new businesses, strengthening and expanding Colfax's three global platforms.In 2019, Colfax made a significant investment by acquiring DJO, a leader in orthopedic solutions. This bold acquisition created a new medical technology platform for Colfax, providing a substantial growth runway aligned with global healthcare trends.The company divested the more cyclical parts of its portfolio - Colfax Fluid Handling and Howden.In 2022, Colfax separated from ESAB and was renamed Enovis Corporation – the successful history of the past will become the cornerstone of future business success and will continue at Enovis.
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