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NuVasive (NUVA) to Acquire SafePassage, Strengthens IONM
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NuVasive, Inc. recently entered into a definitive agreement to acquire intraoperative neurophysiological monitoring (IONM) services provider, privately-held SafePassage. Per NuVasive, the acquisition will strengthen the company's intraoperative neuromonitoring business line.
Although financial terms of the deal have not been disclosed yet, the transaction is expected to close in January 2018 on fulfillment of certain customary closing conditions.
Notably, New York City-basedSafePassage provides IONM and EEG services to surgeons and healthcare facilities across the eastern United States. NuVasive strongly believes that the integration of SafePassage will be highly strategic as this would help it fortify the NuVasive Clinical Services’ (NCS) position as the largest provider of outsourced IONM services (with more than 550 neurophysiologists and oversight physicians) in the United States.
The consolidated giant is expected to deliver services to more than 1,000 customers and 3,000 surgeons. Currently, SafePassage's battery of 135 clinical specialists and support staff handles approximately 12,600 cases annually.
Notably, NuVasive Clinical Services (“NCS”) is the nation's leading provider of intraoperative neuromonitoring services to surgeons and healthcare facilities through the combination of Impulse Monitoring and Biotronic NeuroNetwork. In July 2016, this intraoperative neuromonitoring business line was formed with the buyout of Biotronic. Ever since, this segment of the company has been growing strong. Following the acquisition of SafePassage, NCS is likely to aid more than 100,000 IONM cases per annum in the United States.
This apart, the company raises optimistism with the fact that SafePassage is complementary to the current NCS geographical footprint on a limited overlap between existing healthcare accounts. This would further accelerate the growth of services from business point of view with a deeper reach in the key strategic markets. Also, this advantage will add significant new coverage, particularly in the populous New York region and the East Coast where NuVasive already has a strong spine procedural-selling presence.
Financial Prospects
Post closure of the deal, the transaction is expected to be accretive to the company's adjusted earnings per share ("EPS") in 2018 and beyond. It is also expected to support NuVasive’s long-term targets for revenue growth and expansion of its adjusted operating and EBITDA margins. Additionally, the deal’s completion is expected to meet the company's goals for return on invested capital for tuck-in acquisitions in three years.
In the recent past, clinical services business has witnessed a downtrend due to decline in procedural volume. We expect this integration of SafePassage to Nuvasive’s NCS business to add capabilities to the company to rebound from this difficulty.
Share Price Performance
For the last six months, NuVasive has been trading below the broader industry. The company has declined 25.1%, against the broader industry’s 2.4% gain.
PetMed has a long-term expected earnings growth rate of 10%. The stock has soared roughly 85.7% over a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has skyrocketed 135.7% in a year.
Myriad Geneticshas a long-term expected earnings growth rate of 15%. The stock has surged 81.2% in a year’s time.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
NuVasive (NUVA) to Acquire SafePassage, Strengthens IONM
NuVasive, Inc. recently entered into a definitive agreement to acquire intraoperative neurophysiological monitoring (IONM) services provider, privately-held SafePassage. Per NuVasive, the acquisition will strengthen the company's intraoperative neuromonitoring business line.
Although financial terms of the deal have not been disclosed yet, the transaction is expected to close in January 2018 on fulfillment of certain customary closing conditions.
Notably, New York City-basedSafePassage provides IONM and EEG services to surgeons and healthcare facilities across the eastern United States. NuVasive strongly believes that the integration of SafePassage will be highly strategic as this would help it fortify the NuVasive Clinical Services’ (NCS) position as the largest provider of outsourced IONM services (with more than 550 neurophysiologists and oversight physicians) in the United States.
The consolidated giant is expected to deliver services to more than 1,000 customers and 3,000 surgeons. Currently, SafePassage's battery of 135 clinical specialists and support staff handles approximately 12,600 cases annually.
Notably, NuVasive Clinical Services (“NCS”) is the nation's leading provider of intraoperative neuromonitoring services to surgeons and healthcare facilities through the combination of Impulse Monitoring and Biotronic NeuroNetwork. In July 2016, this intraoperative neuromonitoring business line was formed with the buyout of Biotronic. Ever since, this segment of the company has been growing strong. Following the acquisition of SafePassage, NCS is likely to aid more than 100,000 IONM cases per annum in the United States.
This apart, the company raises optimistism with the fact that SafePassage is complementary to the current NCS geographical footprint on a limited overlap between existing healthcare accounts. This would further accelerate the growth of services from business point of view with a deeper reach in the key strategic markets. Also, this advantage will add significant new coverage, particularly in the populous New York region and the East Coast where NuVasive already has a strong spine procedural-selling presence.
Financial Prospects
Post closure of the deal, the transaction is expected to be accretive to the company's adjusted earnings per share ("EPS") in 2018 and beyond. It is also expected to support NuVasive’s long-term targets for revenue growth and expansion of its adjusted operating and EBITDA margins. Additionally, the deal’s completion is expected to meet the company's goals for return on invested capital for tuck-in acquisitions in three years.
In the recent past, clinical services business has witnessed a downtrend due to decline in procedural volume. We expect this integration of SafePassage to Nuvasive’s NCS business to add capabilities to the company to rebound from this difficulty.
Share Price Performance
For the last six months, NuVasive has been trading below the broader industry. The company has declined 25.1%, against the broader industry’s 2.4% gain.
Zacks Rank & Key Picks
NuVasive carries a Zacks Rank #4 (Sell).
A few better-ranked medical stocks are PetMed Express, Inc. (PETS - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed has a long-term expected earnings growth rate of 10%. The stock has soared roughly 85.7% over a year.
Align Technologyhas a long-term expected earnings growth rate of 28.9%. The stock has skyrocketed 135.7% in a year.
Myriad Geneticshas a long-term expected earnings growth rate of 15%. The stock has surged 81.2% in a year’s time.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>