Walter Eisner • Wed, February 4th, 2015
Wright Medical Group, Inc. has received a “Second Request” from the Federal Trade Commission (FTC) regarding its proposed merger with Tornier N.V.
Second requests are typically made when the FTC staff has heard from potential customers that there may be some difficulties in replacing products sold by the merged entity. Zimmer Holdings Inc. received such a request from the FTC over their plan to merge with Biomet, Inc.
According to the company, all product lines identified in the Second Request are lower extremity products. Tornier said its lower extremity product lines in the Second Request accounted for approximately $14.9 million in U.S. revenue for the identified period.
Needham & Co. analyst Mike Matson says he suspects that the product lines in question consist of Tornier’s ankle products because that is an area of overlap between the two companies. Both have around 30% of market share. He now thinks it’s likely that the FTC will require Wright to sell one of the two companies’ total ankles. He views this as a modest negative since it would mean the ankle could end up in the hands of a competitor like Smith & Nephew plc or Zimmer.