By Jof Enriquez,
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Integra LifeSciences, maker of surgical instruments, orthopedic products, and orthobiologics, plans to spin off its spine business into a standalone, publicly-traded company called SeaSpine. The tax-free transaction to shareholders is expected to be completed within twelve months.
The move – part of a streamlining strategy that started in 2012 – will essentially split the company into three businesses: the independent company SeaSpine, which will focus on spinal hardware and orthobiologics, and two global divisions remaining with Integra. Those two divisions will include the orthopedic and tissue technologies business, which will concentrate on extremities and wound care, and the specialty surgical solutions business, which will focus on neurosurgery and instruments, according to a recent company statement.
"These strategic changes create a much stronger platform for organic growth and execution, and we believe both companies will grow faster separately than together," Peter Arduini, president and CEO, Integra, said in the statement. "Moving forward, Integra will have a simpler, more focused structure from which to operate, which should improve our ability to achieve our longer-term growth and margin improvement objectives. Further, we believe these moves create exciting opportunities for our shareholders and both organizations."
The split will provide both companies with a quicker top-line growth profile, hasten Integra's operating margin expansion strategy, provide equity to shareholders, and allow SeaSpine to focus on its own sales, marketing, and research and development efforts. It will also provide SeaSpine with access to capital markets, according to the statement.
SeaSpine will offer “spinal hardware solutions, including unique interbody devices, minimally invasive surgery solutions, and deformity correction products, as well as IsoTis, a leading brand in orthobiologics,” Integra said. The new company has an estimated $140 million of trailing 12-month revenue as of Sept. 30, 2014, and will be led in the interim by Kirt Stephenson as chairman of the board of directors. Executive search and consulting firm SpencerStuart is engaged to name the future chief executive for SeaSpine.
Last month, Integra announced leadership changes in its orthopedics and tissue technologies business, appointing new “leaders from marketing for the division and strategy for advanced wound care, orthopedics product development, quality and regulatory, U.S. extremities sales, and U.S. spine and orthobiologic sales,” according to a Healio/Spine Surgery Today article.
Integra has also expanded its instruments business by recently acquiring the MicroFrance and Xomed ENT and laparoscopy instrument lines from Medtronic Inc. in an all-cash transaction worth $60 million.