Bottom Line: Smith & Nephew banking on touchdown
LATE on Sunday night in New Jersey, the Denver Broncos limped onto the Super Bowl field missing two key players.
A foot injury and torn knee ligament respectively saw Ryan Clady and Von Miller miss the crucial match, in which rivals the Seattle Seahawks thrash the Broncos to win 43 – 8.
Keeping athletes fit is big business – a fact that Smith & Nephew boss Olivier Bohuon seems to be well aware of. Yesterday, Bohuon paid £1bn in cash for ArthroCare, an innovative US-listed firm that has developed ways to mend shoulders (and tonsils) without the need for invasive surgery.
The move is a smart one for S&N. Traditionally reliant on hip and knee replacements as its bread and butter, yesterday’s deal sits well alongside the group’s more recent push to diversify revenues – including last year’s acquisition of Healthpoint Biotherapeutics, a specialist wound care firm at the forefront of using cell technology to accelerate healing.
Taking control of ArthroCare – listed on Nasdaq – also gives Bohuon a useful foothold in the US, where the sports medicine market is much bigger and well-developed than elsewhere. Get it right in the States and the possibilities for global growth would be attractive.
Investors’ enthusiasm for the deal may have been dampened by S&N’s plans to suspend the final phase of its $300m equity buyback, but shares still rose two per cent, on an otherwise dark day on the FTSE.
Bohuon looks to be on his way to an all-American touchdown.