NuVasive (Nasdaq:NUVA) and Globus Medical (NYSE:GMED) both saw shareholders approve their proposed merger yesterday.
In February, the companies announced an agreement to combine in an all-stock transaction. The deal values NuVasive at $3.1 billion, with Globus shareholders owning roughly three-fourths of the newly merged company.
BTIG analysts raised the question of potential anti-trust challenges for the deal. Such a merger would create the second-largest spine tech company behind Medtronic.
Both companies held separate special meetings of shareholders yesterday, April 27. NuVasive shareholders voted to approve the adoption of the merger, which sees them receive 0.75 of a share of Globus Medical Class A common stock for each share of NuVasive common stock owned at closing.
NuVasive and Globus expect the proposed merger to close after clearance from regulatory authorities and other customary closing conditions. At that time, they expect NuVasive shareholders to own approximately 28% of the combined company. The remaining 72% goes to Globus shareholders on a fully diluted basis.
“We appreciate our shareholders’ strong support for NuVasive’s combination with Globus Medical,” said Chris Barry, CEO of NuVasive. “We look forward to closing the transaction and realizing the significant benefits created by joining our more than 5,000 employees, geographic footprints, highly complementary innovations, customer bases and leading portfolios.”
Hours after NuVasive’s meeting, Globus shareholders voted to approve the issuance of shares of Class A common stock.
“Globus Medical shareholders showed an overwhelming level of support for this merger,” said Dan Scavilla, president and CEO of Globus Medical. “Globus Medical and NuVasive are committed to providing innovative technologies and industry-leading clinical support to help surgeons and healthcare providers deliver continually improving care.”
More on the NuVasive-Globus Medical merger
The two musculoskeletal technology companies previously said they share a vision focused on improving patient care. By annual revenue, NuVasive and Globus Medical represent the No. 7 and No. 8 largest orthopedic device companies in the world, respectively.
Globus and NuVasive say the transaction accelerates their strategies to target the $50 billion musculoskeletal market. That includes spine, orthopedics, enabling technology, power tools, biologics and more. They aim to enable the creation of a comprehensive, innovative portfolio. The companies also each bring “respective operational advantages,” including Globus’ manufacturing capacity and NuVasive’s distribution networks.
Other upsides include growing revenue potential, strong financial profiles and value-creation opportunities. Upon closing, the combined company is set to feature an 11-member board. It includes all eight directors from Globus’ board and three from NuVasive’s.
The agreement places David Paul, Globus board chair, as chair of the combined company’s board. Scavilla takes on the role of CEO, while the company picked Globus CFO Keith Pfeil for the same role at the combined company. NuVasive CEO Chris Barry “will support integration planning of the combined company.”
“Our combined company will have one of the most comprehensive offerings of musculoskeletal solutions and enabling technologies to help surgeons treat their patients,” Scavilla said. “The combined company will have over 5,000 employees who are relentlessly focused on improving patient lives.”