Integra Acquires Ascension Orthopedics

Integra LifeSciences Holdings Corp. is acquiring Ascension Orthopedics Inc. for about $65 million in cash. The deal marks Integra’s entrance into the shoulder implants market and is expected to close at the end September.
“Ascension is an ideal strategic fit for Integra, as it reinforces our commitment to and presence in the fast-growing extremities space,” said Stuart Essig, CEO of Integra.

Austin, Texas-based Ascension develops and distributes implants for the shoulder, elbow, wrist, hand, foot and ankle. The new products will represent about 45 percent of Integra’s orthopedic revenue, according to the company. Integra also gains Ascencion’s pyrolytic carbon technology, which makes more durable and comfortable implants.

“We are very excited to become a part of Integra,” said Guy Mayer, president and CEO of Ascension. “Integra’s dedicated sales force and strong balance sheet provide the stability and infrastructure necessary for us to fuel growth and emerge as a leader in the important extremities market.”

Excluding transaction- and integration-related costs and charges, Integra expects significant recurring cost savings by the third quarter of 2012, but also a negligible impact on third quarter adjusted earnings per share and a dilutive impact of 5 to 6 cents on its fourth quarter adjusted earnings per share in 2011. A greater dilutive impact on its quarterly 2011 GAAP earnings per share is also anticipated. As the company heads into 2012, it expects the acquisition to be 6 to 8 cents dilutive to full year 2012 adjusted earnings per share, with dilution in the first half of the year, followed by a neutral, or slightly accretive second half.

“As we restructure the business, we expect substantial savings to come from reducing redundant costs and increasing the efficiency of the organization,” said Jack Henneman, Integra’s chief financial officer. “The transaction should become accretive to both adjusted and GAAP earnings by the second half of 2012. “

Integra will provide more details during its third quarter conference call in October.

Integra is based in Plainsboro, N.J.