Enovis to Acquire LimaCorporate for $800M

Enovis, a medtech growth company offering orthopedic bracing, surgical implants, and footcare solutions, this week announced a definitive agreement to acquire LimaCorporate S.p.A., an Italian surgical orthopedic implant manufacturer, for about €800 million ($850 million). The €800 million will consist of a €700 million cash payment at closing and €100 million in Enovis common stock.

The acquisition of Lima, according to Enovis, will have several strategic benefits including enabling the company to establish a ~$1 billion revenue reconstruction business with approximately 50% of revenues in the orthopedic extremities markets, an expansion of the businesses international scale through a complementary global customer base and product mix, and improved efficiency in its manufacturing facilities, as well as a “strong innovation engine,” according to Enovis’ press release announcing the deal.

Additionally, the deal will add Lima’s portfolio of surgical solutions and technologies — like the 3D printed Trabecular Titanium — to Enovis’ existing catalog of products, creating cross-selling opportunities and “approximately $40 million in cost synergies to be fully realized by year three after closing through supply chain optimization and cost consolidation,” according to the company.

“We are confident the acquisition of Lima will enable us to build on our strong growth trajectory and global leadership in orthopedic solutions to create immediate and sustainable value for our patients, customers, employees, and shareholders,” said Matt Trerotola, chair and CEO of Enovis, in the release. “With Lima’s complementary surgical solutions and customers, we will have the opportunity to enlarge our profitable recon portfolio and further expand our global presence. In addition, this acquisition will enable us to deliver enhanced financial results through significant cross-selling revenue growth opportunities and meaningful cost synergies.”

After the €700 million cash payment at closing of the deal — financed through a combination of cash on hand, availability under its existing revolving credit facility and committed financing from UBS Investment Bank and JP Morgan Securities — the other €100 million in company stock is expected to be issued within 18 months after closing.

The company said it expects Lima to see sales of $290 million to $300 million and $70 million to $75 million of adjusted EBITDA in 2024. Enovis forecasts that its 2023 revenue will be about $1.7 billion. “The company expects the acquisition to be neutral to slightly accretive to 2024 adjusted earnings per share and accretive in 2025 and beyond,” Enovis wrote.

The completed transaction is expected in early 2024.