» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 129 | NO. 23 | Tuesday, February 04, 2014

Smith & Nephew to Buy ArthroCare in $1.5 Billion Deal

AP

Print | Front Page | Email this story | Comments ()

British medical technology company Smith & Nephew plans to buy U.S. medical device maker ArthroCare in a $1.5 billion deal that it says will strengthen its sports medicine business.

Smith & Nephew said Monday it will pay $48.25 in cash for each share of ArthroCare Corp., which is based in Austin, Texas.

That's a premium of about 6 percent to its closing price of $45.38 on Friday.

Smith & Nephew PLC said ArthroCare's expertise in shoulder joint repair will complement its strength in knee repair. CEO Olivier Bohuon said in a statement that the broader product portfolio and the combined sales force will help generate "significant additional revenue."

ArthroCare has 35.4 million shares outstanding, counting options and restricted stock, according to Smith & Nephew spokesman Charles Reynolds. Smith & Nephew values the deal at $1.7 billion counting ArthroCare's cash. It expects the acquisition to close by the middle of the year.

ArthroCare makes surgical devices, instruments and implants and employs about 1,800 people.

Its stock jumped 6.8 percent, or $3.08, to $48.36 on Monday, less than an hour before markets opened

The stock had already climbed 13 percent so far this year, as of Friday's close. Much of that gain came after the company announced on Jan. 7 that it will pay a $30 million fine to resolve an investigation by the U.S. Department of Justice into alleged securities fraud by its former management.

The Justice Department also is charging the company with one count of conspiracy to commit securities fraud and wire fraud, but it has entered into a two-year deferred prosecution agreement with ArthroCare. If the company meets requirements set by the Justice Department, it won't bring charges against the company.

ArthroCare has said that deal will end the Justice Department's investigation, which was first made public in December 2008.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 109 433 13,330
MORTGAGES 114 591 17,349
FORECLOSURE NOTICES 11 93 3,391
BUILDING PERMITS 0 366 30,930
BANKRUPTCIES 76 352 12,695
BUSINESS LICENSES 21 108 4,597
UTILITY CONNECTIONS 77 564 19,457
MARRIAGE LICENSES 29 151 4,060

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.