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Colfax (CFX) Arm DJO Acquires Stryker's Extremity Products

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Colfax Corporation , through its wholly-owned subsidiary DJO, LLC, recently completed the acquisition of extremity product lines from Stryker Corporation (SYK - Free Report) . The announcement, made by DJO yesterday, is welcoming as it marks Colfax’s entry into the foot and ankle market.

The above-mentioned acquisition has been valued at $15 million.

Remarkably, Stryker is a well-known global medical technology company. It provides medical and surgical equipments, products related to orthopaedics and spice, and those used in neurotechnology.

Inside the Headlines

The buyout comprises Stryker’s products related to finger arthroplasty — including TACTYS and Silicone, Surface Replacement (“SR”) — and total ankle replacement system — Scandinavian Total Ankle Replacement (“STAR”).

The company expects that the addition of Stryker’s products to its portfolio will expand DJO’s reconstructive product offerings. In the initial year of the buyout, revenues to the tune of $20 million are anticipated from the acquired product lines.

Colfax’s DJO is a specialist in making and providing medical devices that are effective answers to pain management, joint reconstruction, musculoskeletal health and vascular health.

DJO’s operations are represented under Colfax’s Medical Technology segment. In third-quarter 2020, this segment’s organic sales inched up 1% year over year on improving clinic activities, recovery in elective surgeries, and strength in general and sports activities.

Zacks Rank, Estimate Trend and Price Performance

With a market capitalization of $4 billion, Colfax currently carries a Zacks Rank #3 (Hold). Its solid product offerings, synergistic gains from acquired assets and innovation capabilities boost the company’s prospects. However, uncertainties related to the pandemic, forex woes and lower selling days might pose concerns in the fourth quarter.

In the past 30 days, the company’s earnings estimates have moved 1.5% north to $1.37 for 2020 and 2.5% to $2.03for 2021. However, the same for the fourth quarter has moved 2% south to 49 cents.

In the past three months, the company’s shares have decreased 6.3% compared with the industry’s growth of 8.8%.

Stocks to Consider

Two better-ranked stocks in the industry are Altra Industrial Motion Corp. and EnPro Industries, Inc. (NPO - Free Report) . Both companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, the current-year earnings estimates for both companies have moved north. Further, the earnings surprise for the last reported quarter was 77.55% for Altra Industrial and 109.38% for EnPro Industries.

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