Medical technology company SeaSpine Holdings (SPNE) has completed the $110 million acquisition of 7D Surgical.
SeaSpine provides surgical technology and solutions for treating spinal disorders. 7D surgical develops optical technologies and machine vision-based algorithms in order to improve surgical workflow and patient care.
The acquisition is expected to accelerate SeaSpine’s short-term revenue growth and help SeaSpine address the complete process of patient care while also expanding the scope of its services beyond the operating room.
SeaSpine President and CEO Keith C. Valentine said, “We are truly excited to welcome the 7D Surgical team and their market-leading Flash Navigation technology to the SeaSpine family.”
Valentine added, “The acquisition of 7D Surgical brings an additive core competency to the organization and complements our innovative philosophy and approach to improving spine surgery by delivering clinical value and improving surgeon, staff, and patient safety profile compared to other navigation technologies in the market.” (See SeaSpine stock analysis on TipRanks)
On May 3, BTIG analyst Ryan Zimmerman reiterated a Buy rating on the stock with a $28 price target (32.2% upside potential).
Commenting on the 7D acquisition, Zimmerman said, “SPNE expects ~$7 million in sales for the year from 7D. Recall that 7D had contracted value of ~$19 million stemming from the existing 54 systems in the field since their launch.”
Zimmerman added, “SPNE continues to expect gross margins to expand by 100-150 basis points per year over the next 2-3 years irrespective of 7D and 150-250 basis points as 7D increases in scale.”
Based on 7 unanimous Buys, consensus among analysts is that SeaSpine is a Strong Buy. The average analyst price target of $27.14 implies 28.1% upside potential.
Shares have gained about 88.8% over the past year.
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