Smith & Nephew is bolstering its fast-growing orthopaedics business with the acquisition of Midland Medical Technologies (MMT), the global leader in metal-on-metal hip resurfacing. The UK healthcare giant is paying £67m in cash and loan notes for MMT, plus up to £33m in deferred consideration, should the business achieves certain milestones.
At five times sales (of £20m in 2003), the price looks pretty punchy. However, metal-on-metal resurfacing was the only expertise missing from Smith & Nephew's armoury. The procedure is a lot less invasive than standard surgical techniques, meaning it can be used on younger, more active patients. MMT's technology has already been tested in over 27,000 patients across Europe, and the plan now is to gain approval in the all-important US market.
