Medtronic to acquire China Kanghui Holdings
Friday, September 28, 2012
Medtronic, a global medical technology company based in Minneapolis, Minn., has agreed to acquire China Kanghui Holdings for approximately $816 million in cash ($30.75 per American depository share). The total value of the transaction, net of Kanghui’s cash, is expected to be approximately $755 million.
“China is one of the fastest growing medical device markets with significant scale opportunities, and now Medtronic will establish a bigger and more direct local presence,” said Chris O’Connell, executive vice president and president, restorative therapies group, Medtronic. “Kanghui brings Medtronic a broad product portfolio, a strong local R&D and manufacturing operation, a vast China distribution network and an exceptional management team. This move will provide Medtronic sustainable advantages in the fast-growing Chinese orthopedic segment, as well as a foothold in the emerging global value segment in orthopedics.”
As a provider of orthopedic devices in China, Kanghui brings a strong product portfolio and new product pipeline in trauma, spine and joint reconstruction to Medtronic. The combined portfolio expands Medtronic’s offerings in orthopedic surgery and complements the company’s existing presence in spine, neurosurgery, neuromodulation, advanced energy and surgical navigation.
“We are proud of the company we’ve built and recognize there is a tremendous opportunity to accelerate our global vision by building on Medtronic’s size, scale and expertise as part of this combined organization,” said Libo Yang, CEO of Kanghui. “We look forward to bringing to Medtronic our local operating expertise in China, including our wide distribution network, strong local sales and marketing teams, local manufacturing and R&D, as well as our active presence across a number of value orthopedic product lines that are necessary for success in China and other emerging markets.”
The transaction is expected to close in the next few months and is subject to customary closing conditions, including approval from the shareholders of Kanghui. Medtronic expects the net impact from this transaction to be earnings neutral for fiscal years 2013 and 2014 as the company intends to offset any dilutive impact of the transaction.