Zacks Equity Research – Zacks / November 16, 2021
NuVasive, Inc. NUVA shares gained nearly 5% to reach $58.90 yesterday, after a takeover rumor of this minimally invasive spine implant major by prominent musculoskeletal solutions provider Globus Medical, Inc. GMED surfaced. Shares of Globus Medical dropped 4.4%, as largely expected.
The takeover rumor first surfaced in a Bloomberg report, which stated that per an insider source, Globus Medical had made a preliminary takeover offer to its smaller competitor, NuVasive. The source also stated that the acquisition offer price was $3 billion.
Although the insider source claimed that the concerned companies are in early talks about a possible consolidation, there is no guarantee that NuVasive and Globus Medical will finally reach a deal. Neither NuVasive nor Globus Medical’s representatives shed any light on the matter.
How is the Market Responding?
The majority of the analysts across the market are optimistic about the prospects of this probable takeover.
According to the Bloomberg report, if the consolidation occurs, both the companies will gain in terms of scale and negotiating power against hospitals, which purchase their products. During the pandemic, spinal solution makers had a tough time due to the mass deferral of elective procedures.
Reuters, on the other hand, noted that the potential combination would accelerate consolidation in the spine surgery market, where smaller players are turning to deal making to compete against the stalwarts.