UK medical device specialist Smith & Nephew and German partner Beiersdorf have announced plans to divest their 50/50 joint venture BSN medical.
The JV, which was set up in April 2001, specialises in areas such as bandaging, plaster casts, pressure stockings and splints, and is a successful business with turnover in 2004 of 504 million euros and operating profits of 70 million. However, BSN medical is not part of either firms’ core business and the partners said that “the continuation of the business independently from Beiersdorf and S&N in 2006 marks the logical next stage in its development.”
Morgan Stanley has been hired to handle the divestment and, while no potential buyer has been mentioned yet, observers believe that this is the type of deal that could interest private equity firms.
In terms of the price for the JV, estimates range from 450 to almost 660 million euros, while analysts at Lehman Brothers say that the disposal will leave S&N with between £260-£350 million in cash for its share. The broker adds that the firm will be able to use the funds to strengthen its fast-growing orthopaedics franchise through another bolt-on acquisition and/or by increased R&D investment.
Speaking of which, S&N has been informed by the US Food and Drug Administration that its Orthopedic and Rehabilitation Devices Panel intends to review the company’s pre-market approval application for its Birmingham Hip Resurfacing implant system on September 8.
The procedure has been used in nearly 30,000 patients in the UK, Germany and Australia and was acquired by S&N when it bought the British firm Midland Medical Technologies last year [[15/03/04g]].