Conmed (CNMD) Announces Acquisition of SurgiQuest; Leerink Partners Reiterates Outperform

Leerink Partners reiterated an Outperform rating and $51.00 price target on CONMED (NASDAQ: CNMD) following the company's announced acquisition of SurgiQuest for $265M in cash. CNMD is financing the deal through cash and a new term loan ($150M) with a deal close expected in 1Q16. Management expects ~$55-$60M contribution (no synergies) to the top-line and $15M cost synergy in 2016.

Analyst Richard Newitter commented, "We're fans of CNMD's acquisition of SurgiQuest (announced this AM) for $265M in cash. As we’ve said previously we think M&A is an underappreciated aspect of the CNMD story and we think this asset should help jump start the growth trajectory in the general surgery business with a differentiated (and rapid growth) technology. While the deal is expected to be "slightly dilutive" to '16 EPS on a reported basis, CNMD will be switching to a cash EPS metric (+0.30/shr EPS step-up before any accretion) following the transaction and expects double digit (DD) accretion with $15M of anticipated cost synergies on top of that. Reiterate OP rating and $51 PT."

For an analyst ratings summary and ratings history on CONMED click here. For more ratings news on CONMED click here.

Shares of CONMED closed at $38.34 yesterday.

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