UTICA — The “revitalization” of ConMed’s advanced-surgical business is a “key priority” in its general-surgery strategy.
Curt Hartman, president and CEO of ConMed Corp. (NASDAQ: CNMD), made the comment in the firm’s Nov. 16 conference call about his company’s acquisition of privately held SurgiQuest, Inc.
Utica–based ConMed on Nov. 16 announced it would acquire the Connecticut–based surgical-device maker for $265 million.
“With this transaction, we anticipate that SurgiQuest’s proprietary AirSeal system will become a centerpiece in our advanced surgical-product portfolio. As I have stated on many occasions, acquisitions will play an important role in the growth of ConMed and our turnaround,” said Hartman.
ConMed formed its advanced-surgical business in January when it combined a previously independent endomechanical platform with its advanced-energy platform, according to Hartman.
ConMed said in a news release that it would finance the SurgiQuest acquisition through a combination of cash and borrowings under a new credit line.
The company expects the transaction to close in the first quarter of 2016. The deal is subject to customary closing conditions, including getting regulators to approve it.
Founded in 2006 and headquartered in Milford, Connecticut, SurgiQuest develops, manufactures, and markets the AirSeal system, the first “integrated,” access-management technology for use in laparoscopic and robotic-surgery procedures, according to ConMed.
“We’re very excited about adding AirSeal to our product portfolio, as it is highly complimentary to our current advance-surgical offering and it significantly enhances our provider relationships, especially in the area of robotic surgery. Furthermore, we expect SurgiQuest’s R&D expertise and relevant experience across the advanced surgical platform to accelerate our current advanced surgical-innovation capability,” said Hartman.
ConMed has a direct selling presence in 16 countries outside the U.S., and international sales constitute more than 50 percent of its total sales, the company said.
“Our current advanced-surgical product portfolio is sold through a direct sales force in the United States and through a combination of direct and export distributor channels in the international markets,” said Hartman.
Kurt Azarbarzin, SurgiQuest’s founder and CEO, will join ConMed as chief technology officer of the advanced-surgical business.
SurgiQuest employs about 125 people, Hartman said in response to a question from a company investor.
“You should assume a large percentage of those are in sales in the U.S. market, direct sales, clinical support, sales management,” Hartman added.
ConMed said it expects the acquisition to add between $55 million and $60 million to its revenue in its 2016 fiscal year. In addition, ConMed projects net cost savings of about $15 million per year. ConMed on Oct. 21 reported adjusted net earnings of $10.6 million, or 38 cents a share, in the third quarter, excluding non-recurring items. The firm missed analysts’ earnings estimates by 5 cents per share and lowered its profit forecast for 2015.
The company employs about 3,400 people.