Shares of medical devices provider Globus Medical (NYSE:GMED) are tanking today after the company announced an all-stock combination with NuVasive (NASDAQ:NUVA), a leading name in spine technology.
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Under the deal, NUVA investors will receive 0.75 GMED shares for each NUVA share held by them. This points to a $3.1 billion equity value for NUVA and its investors will own 28% of the combined entity. GMED investors will own the rest 72%.
The strategic move brings together the two companies’ complementary expertise, geographic presence, and customers. Together the two companies will be present in 50 countries while boosting their operational abilities.
Further, the combined entity is anticipated to achieve EBITDA in the mid 30% and $170 million in cost synergies. The transaction is expected to close in the middle of this year and for the full year 2023, GMED expects net sales to rise in the range of 7% to 8%.
While GMED shares have declined 9% over the past 52 weeks, short interest in the stock still remains elevated at about 6.3% at present. NUVA shares, meanwhile, are trending higher today.
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