Globus Medical to Merge With NuVasive in $3.1B Deal

Ending years of speculation, Globus Medical announced today a $3.1 billion merger deal with NuVasive Inc. 

Under terms of the all-stock deal—unanimously approved by both companies’ Boards of Directors—NuVasive shareholders will receive 0.75 a share of Globus Medical Class A common stock for each share of NuVasive common stock owned at the transaction’s closing. Based on the exchange ratio, the implied share price for NuVasive would be $57.72, based on Globus Medical’s closing share price on Feb. 8. When the deal is finalized, NuVasive shareholders will own approximately 28% of the combined company, and Globus Medical shareholders will own about 72%, on a fully diluted basis.
 
“This transaction reflects our mission to become the leading musculoskeletal technology company in the world by developing products that promote healing in patients with musculoskeletal disorders,” Globus Medical President and CEO Dan Scavilla said. “With NuVasive, we can help support more patients through innovation and expanding our commercial reach to provide service to our surgeon and hospital partners. We look forward to combining the NuVasive and Globus Medical teams to capitalize on the many opportunities to improve patient care and create sustainable shareholder value.”

The merger accelerates each company’s globalization strategy to target the $50 billion musculoskeletal market, which includes spine, orthopedics, enabling technology, power tools, biologics and more. Together, Globus Medical and NuVasive will have a presence in more than 50 countries with over 5,000 employees. The new organization’s larger commercial sales organization will enable it to further penetrate existing and future markets, reaching more surgeons and patients around the world.
 
“Our combination with Globus Medical is transformative, joining two companies with highly complementary capabilities, geographic footprints and customer bases,” NuVasive CEO Chris Barry stated. “Together, we will be able to offer a portfolio of clinically proven solutions, supported by strong commercial and surgeon education teams. The new company will be well-positioned to deliver value creation for shareholders, further support our surgeon partners—and most importantly, change the lives of more patients.”
 
Benefits of the merger include:

• A comprehensive and innovative portfolio in spine and orthopedics. The transaction pairs Globus Medical’s and NuVasive’s complementary spine and orthopedic solutions and enabling technologies to create a comprehensive, innovative offering.
• Continued commitment to product development and surgeon education. Globus Medical and NuVasive both have strong records of developing technology that solves unmet clinical needs for the treatment of musculoskeletal disorders. Globus Medical will continue to prioritize collaboration with healthcare professionals to develop these products and solutions to treat the full continuum of care from planning to execution to postoperative data.
• Expands operational capabilities. The company will leverage operational excellence capabilities to further unlock manufacturing capacity and asset utilization to support the commercial organization. Globus Medical and NuVasive will benefit from their respective operational advantages—including but not limited to Globus Medical’s in-house manufacturing capacity and NuVasive’s global distribution networks, including NuVasive’s Memphis-based global distribution center.
• Compelling upside revenue potential. The Globus Medical and NuVasive product, customer, and geographic footprints are highly complementary. As a result, through this transaction, the combined company expects to serve more surgeon customers with more solutions in more geographies around the world, creating compelling growth opportunities over the long-term.
• Strong financial profile and value creation opportunity. The combined companies have strong track records of delivering above-market net sales growth. The merged organization will leverage Globus Medical’s financial rigor and discipline as it aims to deliver a mid-30-percent EBITDA profile over the next three years, which includes approximately $170 million in identified cost synergies.

 
Upon the merger’s closing, the combined company will have an 11-member board composed of all eight directors from Globus Medical and three from NuVasive. The combined organization will be chaired by Globus Medical Board Chairman David Paul, and led by Scavilla (CEO and board member). Globus Medical Chief Financial Officer Keith Pfeil will serve as CFO, and Barry will support integration planning.

The transaction is expected to close in the middle of this year, subject to the approval of both companies’ shareholders, regulatory approval, and other customary closing conditions.
 
Globus Medical estimates preliminary 2022 net sales growth to be 6.8% as reported and 8.2% in constant currency, compared with $958.1 million in 2021 net sales. NuVasive expects preliminary 2022 net sales growth of 5.5% as reported and 8.5% in constant currency, compared with $1.13 billion in 2021 net sales.

Globus Medical expects 7%ꟷ8% of net sales growth this year (constant currency), while NuVasive anticipates 6%ꟷ8% net sales growth for 2023 (constant currency).
 
Goldman Sachs & Co. LLC is serving as financial advisor to Globus Medical, and Goodwin Proctor LLP is serving as legal counsel. BofA Securities Inc. is serving as financial advisor to NuVasive, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
 
Globus Medical is a musculoskeletal solutions company based in Audubon, Pa. The company was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. 
 
NuVasive develops spine technology. The company’s less-invasive, procedurally integrated surgical solutions are designed to deliver reproducible and clinically proven outcomes. With more than $1 billion in net sales, NuVasive operates in more than 50 countries serving surgeons, hospitals, and patients.