Medtronic To Acquire Sofamor Danek

Medical device giant Medtronic Inc. plans to expand its neurological business by purchasing Sofamor Danek Group Inc. for about $3.7 billion in stock. Medtronic will pay $115 each for the 32 million Sofamor shares under terms of the deal announced today.

Sofamor Danek, based in Memphis, is the leader in the $850 million worldwide market for technologies used by spine surgeons, who perform more than 275,000 operations per year. The company, which had $400 million in sales last year, has been growing at a 30% rate, fueled by sales of spinal-fusion products.

Medtronic had $2.6 billion in sales for the year ended April 30 including $400 million in the neurology products business.

The deal is subject to Sofamor Danek shareholder approval and regulatory approvals.