RTI Surgical’s move to sell its original equipment manufacturing business to Montagu Private Equity for $490m has delighted its long-suffering shareholders. The deal is huge for the orthopaedics company, which had a market cap of only $203m before the deal was announced. RTI’s stock closed up 63% yesterday after it said it would rid itself of the unit, which the sellside sees as the slowest-growing out to 2024, according to EvaluateMedTech’s consensus forecasts. RTI plans to remake itself as a pure-play spine business; its spinal therapies unit includes the products it obtained from the acquisitions of Zyga Technology two years ago and Paradigm Spine last March, and is forecast to grow much more rapidly than the manufacturing business. As well as investing in its spine offering, the company intends to become debt-free – it had $51.6m total liabilities at the end of October. $480m of Montagu’s payment comes as cash; the other $10m is unspecified.
|Global sales ($m)|
|Orthopaedics||Original equipment manufacturing||125||128||137||146||+3%|
|Orthopaedics/ other||Sports medicine and orthopaedics||55||56||59||62||+2%|
|Total company revenues||323||348||391||433||+6%|