Zimmer Holdings (ZMH), a global orthopedic and surgical products company, recently announced the acquisition of Sodem Diffusion S.A., based in Geneva, Switzerland. Sodem manufactures the line of Soplus Orthopedic Surgical Power Tools. Post-acquisition, it will be called Zimmer Surgical, S.A., a part of Zimmer Surgical, based in Dover, Ohio.
According to Zimmer, SoPlus’ small as well as large bone product categories will broaden its product range thereby strengthening its market position in the surgical power tool market valued at over $1 billion.
Earlier, Zimmer announced that it has completed the acquisition of Beijing Montagne Medical Device Co., Ltd. in a move that is expected to bolster its presence in the growing Chinese market. The acquisition will permit Zimmer to provide an expanded product line in knees, hips and powered surgical instruments geared for the Asian market. In this regard, Montagne will provide access to R&D and manufacturing facilities.
Zimmer derives over 75% of its sales from reconstructive implants, which recorded a 10% sequential decline in sales during the last quarter. Economic uncertainty, pricing pressure together with austerity measures adopted in Europe were the primary reasons behind the decline.
However, we are encouraged to note that Zimmer expects to mitigate these pressures with the launch of its new patient specific and posterior referencing instrumentation systems. The company expects some of its new products such as the MMC metal-on-metal hip cup and Continuum acetabular system along with the limited rollout of posterior referencing instruments (PRI) for its NextGen Knee to consistently contribute to growth going forward.
Zimmer competes with Stryker Corp. (SYK) and others in the competitive orthopedic market. We currently have a Neutral rating on the company.
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