After moving from a massive orthopedics acquisition to a spinoff-launching company split last year, the pendulum has swung back toward major dealmaking once again.
Enovis—the year-old independent medtech born out of the portfolio previously held by the conglomerate known as Colfax—has signed on to an 800 million euro deal to acquire the Italian orthopedic implant manufacturer Lima. The transaction includes a 700 million euro payment in upfront cash, or about $741 million U.S., with the remainder made up in shares of Enovis stock.
According to the companies, the acquisition will result in a new billion-dollar player in reconstruction procedures, with about half of its revenues in the quickly growing markets focused on the body’s extremities. The deal is slated to close in early 2024.
“With Lima’s complementary surgical solutions and customers, we will have the opportunity to enlarge our profitable recon portfolio and further expand our global presence,” Enovis CEO Matt Trerotola said in a statement.
The company expects Lima’s catalog—which also includes 3D-printed titanium implants, as well as systems for the shoulders, elbows, hips and knees—to approach $300 million in sales by the end of next year. Enovis said Lima’s revenues have grown at a high single-digit annual rates over the past decade while jumping into “the low teens” within the last several years.
Enovis plans to pay for the deal through its cash on hand, plus its current revolving credit and new financing from UBS Investment Bank J.P. Morgan Securities. The company said it also plans to see about $40 million in cost synergies by the third year, through supply chain optimization and cost consolidations.
“Combining these two leading orthopedic businesses into one global platform creates an exciting opportunity to build on the strengths of both Enovis and Lima in developing patient-tailored devices and orthopedic products,” said Massimo Calafiore, CEO of Lima, a company founded in 1945 with production facilities in Udine, located north of Venice, and on the island of Sicily.
Enovis officially launched in April 2022, after Colfax rebranded itself following the spinout of its ESAB brand, which included welding and cutting products for construction, shipbuilding and other industrial applications.
Colfax had previously shelled out $3.15 billion to acquire the orthopedics company DJO Global in 2019—one of the largest medtech deals of that year—to take possession of its Aircast and walking boots for sprained ankles, as well as its surgical implants for hip, knee and shoulder reconstruction.
Since its launch, Enovis spent $34.2 million to acquire Insight Medical Systems, with its FDA-cleared augmented reality solution for hip and knee replacement surgery and put down $96.9 million for Novastep, a bunion treatment-focused subsidiary of the French developer Amplitude Surgical.