Zimmer Biomet Acquires Medtech SA, Joins Surgical Robotics Fray
By Jof Enriquez,
Follow me on Twitter @jofenriq
Zimmer Biomet is entering the burgeoning surgical robotics market through the acquisition of French company Medtech SA, developer and maker of the ROSA robotic device for neurological and spine procedures.
Under the deal, Zimmer buys almost 59 percent of the outstanding share capital of Medtech from founder Bertin Nahum and other stockholders, as well as all outstanding convertible bonds and warrants previously issued by Medtech to private equity firm Ally Bridge Group, according to an SEC filing. The total transaction value adds up to at least $132 million. In addition, as soon as possible, and subject to review by the French federal regulator Autorité des marchés financiers (AMF), Zimmer will make an all-cash simplified tender offer to acquire the balance of Medtech shares.
"This acquisition of Medtech by Zimmer Biomet is a powerful validation of the innovative technologies – and an impressive global commercial footprint – of the Company under the leadership of its Founder and CEO, Bertin Nahum," said Frank Yu, Founder, CEO and CIO of Ally Bridge Group, in a press release.
Nahum will retain his leadership role and will head Zimmer's robotic development activities at a "center of excellence," which is Medtech's current headquarters in Montpellier, France.
"We expect Zimmer Biomet's industry-leading position to enable Medtech's innovative minimally invasive surgical robots to reach a much greater number of patients suffering from neurological and spine disorders globally," added Yu.
Medtech says its ROSA robot is currently used in 20 hospitals in Europe, North America, Asia, and the Middle East. ROSA features a robotic arm with six degrees of freedom, advanced haptic capability, and a non-invasive and touch-free registration system.
According to the company's website, its ROSA Brain system can be used for any type of cranial procedure requiring surgical planning with preoperative data, patient registration, and precise positioning and handling of instruments, and it is the only robotic assistant approved for neurosurgical procedures in clinical use in Europe, the United States, and Canada. The ROSA Brain received FDA approval in 2009.
The ROSA Spine system, meanwhile, achieved recently a milestone 100 minimally invasive spinal surgeries performed. ROSA Spine received CE Mark approval in 2014 and was granted FDA clearance in January 2016.
Zimmer Biomet's purchase of Medtech's robotic surgical platform could place it in direct competition with Mazor Robotics, which recently partnered with device giant Medtronic on a robotic surgical guidance system for spine surgery.
"Medtech's ROSA robot currently has applications in brain and spine surgery. Medtech's business has been more brain-oriented while Mazor Robotics' business has been more spine oriented," Needham & Company analyst Mike Matson told Street Insider. "However, we expect this to change given Zimmer's large spine implant business and as a result we now view ROSA as more of a threat to Mazor. We think that the deal is positive for Zimmer since it provides it with a robotics platform that might eventually have applications beyond brain and spine surgery for a relatively low price."
With the purchase of Medtech, Zimmer joins the increasingly crowded surgical robotics space, which is projected to reach $20 billion by 2021, according to RnR Market Research. Aside from Medtronic-backed Mazor, key players include segment pioneer Intuitive Surgical, TransEnterix, Stryker, Smith & Nephew, and Titan Medical. Last year, Johnson & Johnson and Verily Life Sciences launched their joint surgical robotics joint venture, Verb Surgical.
Other players include Auris Surgical Robotics, Vecna Technologies, Sofar, Health Robotics, Swisslog, KB Medical, Globus Medical, and Cambridge Medical Robotics (CMR), which just closed a $20 million series A round this week.
Zimmer Biomet has been active on the M&A front lately, buying sports medicine company Cayenne Medical for an undisclosed amount in April, and French spine surgical solutions company LDR for $1 billion in June.