Sulzer Medica Ltd. Agrees to Purchase Spine-Tech Inc.
Spine-Tech Inc., which makes surgical implants to treat spinal disorders, agreed to be acquired by Switzerland's Sulzer Medica Ltd. for $595 million.</br></br>The boards of both companies approved Sulzer Medica's bid of $52 a share, which represents a 14% premium over Monday's closing price for Minneapolis-based Spine-Tech. In trading yesterday on the Nasdaq Stock Market, Spine-Tech shares rose $6, or 13%, to $51.50.</br></br>Analysts played down prospects of a rival bidder emerging to challenge Sulzer Medica, a publicly traded unit of engineering giant Sulzer AG. They said Spine-Tech's sales and marketing efforts should receive a sizable boost from the deal.</br></br>Spine-Tech is one of a handful of companies pioneering a minimally invasive surgical implant to treat degenerative disorders of the spine. The procedure, which employs hollow titanium tubes as a biological scaffold, is less arduous for patients than traditional surgical treatment and also requires briefer hospitalization -- a powerful argument to cost-conscious health-care providers.</br></br>Spine-Tech faces competition from U.S. Surgical Corp.'s Surgical Dynamics unit, which currently markets its Ray Threaded fusion cage, and from Sofamor/Danek Group Inc., which recently was denied U.S. approval for its spinal-cage product. Analysts expect the Sofamor product to eventually get marketing clearance.