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Smith+Nephew acquires Engage for up to $135M

London, UK, January 19, 2022 (PRNewswire) — Smith+Nephew (LSE: SN,NYSE: SNN), the global medical technology business, announces the acquisition of Engage Surgical, owner of the only cementless unicompartmental (partial) knee system commercially available in the US.

This acquisition strongly supports Smith+Nephew’s strategy for growth by transforming its business through innovation and acquisition, while also providing differentiation for its customers. The Engage Surgical Partial Knee System is a novel, modern cementless knee implant to serve a resurgent segment driven by the potential for better long-term fixation through biologic integration, shorter operating times, and the shift to Ambulatory Surgery Centers (ASCs).

Randy Kilburn, Executive Vice President & General Manager, Reconstruction, Robotics and Digital, said:

“Smith+Nephew is now the only medical device company offering both cemented and cementless partial knee implants in the US, as well as robotics-assistance through the CORI™ Surgical System that is well-suited for the precise alignment needed. Through our Sports Medicine franchise we have an established, strong position in ASCs where the vast majority of partial knees in the US are performed. Our VISIONAIRE™ business, the high performance and small footprint of CORI, plus our partial knee portfolio, is a unique compelling offering for customers.”

The acquisition will drive Smith+Nephew’s Robotics and Real Intelligence strategy. Partial knee procedures are well-matched for robotics due to the need for precise alignment and Smith+Nephew’s CORI Surgical System already supports the cemented JOURNEY II™ unicompartmental knee. The Engage Surgical Partial Knee System is optimised for robotics and will have an application with CORI in the future. Engage Surgical’s Partial Knee System also complements Smith+Nephew’s focus on serving the growing outpatient market, with an increasing proportion of knee procedures performed in ASCs.

Dan Justin, Chief Executive Officer, Engage Surgical, said:

“The Engage Surgical Team is excited about joining Smith+Nephew to help expand the impact of the Engage Surgical Partial Knee System and integrating it with the CORI Surgical System. Smith+Nephew is well-suited and well-prepared to continue our mission of providing better outcomes for knee arthroplasty patients.”

With Engage Surgical’s Partial Knee System, Smith+Nephew expects to be able to drive market expansion in the US, and in time in other markets as regulatory approvals are secured. Engage Surgical’s Partial Knee System currently has regulatory clearance in the US where it is in limited market release.

The partial knee market is currently worth approximately $300 million in the US (SmartTRAK) and is expected to grow faster than the total knee market and by around 4% per annum through 2029 (Millennium Research Group, Inc). Smith+Nephew expects cementless partial knees will grow ahead of overall partial knees, in line with recent patterns seen in the cementless segment.

The cost of the acquisition is up to $135 million contingent on sales performance. The acquisition was financed from existing cash and debt facilities. Engage Surgical is located in Orlando, Florida.

Source: https://www.prnewswire.com/news-releases/smithnephew-acquires-novel-cementless-partial-knee-system-301463369.html

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