Medical equipment giant Medtronic is to acquire Israeli spinal surgery company Mazor Robotics for some $1.64 billion in an all-cash deal, or $1.34 billion net of Medtronic’s existing stake in Mazor, it was announced last Thursday.
Medtronic, which held a stake of about 11 percent in Mazor before the deal unanimously approved by the boards of both companies, agreed to pay $58.50 per American Depository Share or $29.25 per ordinary share in cash, the companies said in a statement.
Mazor, a maker of robotic guidance systems for spine and brain surgeries, made headlines last year when Israeli surgeons performed the world’s first dual robotic surgery using Mazor’s Renaissance Guidance System and Siemens’ Artis Zeego.
The three-hour surgery at Hadassah Medical Center at Ein Kerem in Jerusalem was performed on a factory worker who broke his leg in two places and broke six spinal vertebrae in an accident.
The company was founded by Moshe Shoham and Eli Zehavi in 2001, and is based in Caesarea. Medtronic is a multinational company headquartered in Ireland and Minnesota.
In May 2016, Medtronic entered a multi-phase strategic partnership with Mazor, making equity investments and becoming a distributor of its products. In 2017, Medtronic became the exclusive worldwide distributor of the Mazor X system, which was launched in 2016.
Medtronic said it expects the acquisition of Mazor “to generate a double-digit return on invested capital by year four, with an increasing contribution thereafter.”
“We believe robotic-assisted procedures are the future of spine surgery, and provide surgeons a more precise, repeatable, and controlled ability to perform complex procedures,” said Geoff Martha, executive vice president and president of the Restorative Therapies Group at Medtronic.
“The acquisition of Mazor adds robotic-assisted guidance systems to our expanding portfolio of enabling technologies, and we intend to further cultivate Mazor’s legacy of innovation in surgical robotics with the site and team in Israel as a base for future growth.”
“The Mazor team and product portfolio’s full integration into Medtronic will maximize our impact globally through Medtronic’s channels, advance our system’s leadership position in the marketplace, and drive the realization of our vision to heal through innovation,” said Ori Hadomi, CEO of Mazor Robotics.
More than 200 Mazor systems are in clinical use on four continents and have guided the placement of more than 250,000 implants during some 40,000 procedures, enabling minimally invasive spine surgery to become standard procedure in many hospitals.
The Mazor acquisition is one of several large buy-outs of Israeli companies this year. In March, Orbotech was acquired for $3.4 billion by California’s KLA-Tencor Corporation, making it the fifth biggest acquisition in Israel’s history. In August, PepsiCo bought Israel’s SodaStream for $3.2 billion.
In May, Israeli company Playtech purchased an Italian betting company, Snaitech for $1.05 billion.