Medtronic to Acquire Mazor Robotics for $1.64 Billion

   By Aisha Al-Muslim

Medtronic PLC (MDT) has reached a deal to acquire medical device maker Mazor Robotics Ltd. (MZOR, MZOR.TV) for a total of about $1.64 billion as the company looks to strengthen its hold as a provider of technology for robotic-assisted spine surgeries.

Under the merger agreement, Dublin-based Medtronic will acquire all outstanding ordinary shares of Israel-based Mazor Robotics for $58.50 per American Depository Share, or $29.25 per ordinary share, in cash, the companies announced Thursday. The deal is expected to close during Medtronic's third fiscal quarter, ending Jan. 25.

ADRs of Mazor closed Thursday at $52.75 and its ordinary shares closed at $26.25. Medtronic's stock is up nearly 23% in the last year, while ADRs of Mazor are up more than 6.1% in the last 12 months.

The transaction is expected to be "modestly dilutive" to Medtronic's fiscal 2019 adjusted earnings per share, the company said. Medtronic expects the acquisition to "generate a double-digit return on invested capital by year four, with an increasing contribution thereafter," it said.

By combining Medtronic's spine implants, navigation, and intra-operative imaging technology with Mazor's robotic-assisted surgery systems, Medtronic plans to offer a fully-integrated procedural solution for surgical planning, execution and confirmation, the company said. The companies plan to showcase their technology integration at the North American Spine Society's annual meeting next week in Los Angeles.

In May 2016, Medtronic and Mazor agreed to a multi-phased strategic and equity investment agreement. Then in August 2017, Medtronic expanded the partnership to become the exclusive distributor of the Mazor X system.

Founded in 2001, Mazor pioneered the application of robotics technology and guidance for use during spinal procedures. To date, more than 200 Mazor systems are in clinical use on four continents and have guided the placement of more than 250,000 implants, the company said.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

September 20, 2018 20:04 ET (00:04 GMT)

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