Extremities market to change shape by next year

Smith & Nephew is the number four player in both artificial hips and knees, and now wishes to contest the market for extremity implants too. The UK group has spent $240m on the extremity business of Integra Lifesciences, which consists of implants used in the replacement of shoulders as well as reconstruction of bones in the hand, wrist, elbow, foot and ankle. The business brought in revenues of $90m last year, making it a relative minnow – the leader in this segment, Wright Medical, had extremities sales of $1.9bn last year. Wright is, of course, in the process of being acquired by Stryker, but last week the process was delayed for the fifth time. Stryker had also announced extensions to the deal’s close in February, April, June and August. The merger is under antitrust investigation in both the US and the UK, and at the moment only 12% of Wright shares have been tendered; doubtless Stryker hopes that once the FTC gives the go-ahead – if, indeed, it does – the rest of the shares will follow. The $4.7bn deal is now scheduled to close on October 14, but at this point it seems unwise to rule out further extensions.