Needham & Company Reiterates Buy as Zimmer Biomet Holdings (ZBH) Acquires Medtech
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Needham & Company reiterated a Buy rating on Zimmer Biomet (NYSE: ZBH), and raised the price target to $143.00 (from $134.00), as the company acquires Medtech SA for €50 per share. Needham estimates that the deal values Medtech's equity at ~ $132M. Consensus estimates have Medtech generating FY16 sales of $10M, FY17 sales of $23M, and FY18 sales of $38M.
Analyst Mike Matson commented, "ZBH is acquiring the French robotics company Medtech SA for €50 per share (implying an equity value of ~$132M). Medtech's ROSA robot currently has applications in brain and spine surgery. Medtech's business has been more brain-oriented while Mazor Robotics' (MZOR) business has been more spineoriented. However, we expect this to change given ZBH's large spine implant business and as a result we now view ROSA as more of a threat to MZOR. We think that the deal is positive for ZBH since it provides it with a robotics platform that might eventually have applications beyond brain and spine surgery for a relatively low price. We have raised our price target to $143 from $134 given peer multiple expansion."
Shares of Zimmer Biomet closed at $125.42 yesterday.
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