We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CONMED's Buffalo Filter Buyout Likely to be Accretive in 2020
Read MoreHide Full Article
CONMED Corporation (CNMD - Free Report) recently announced a definitive agreement to acquire Buffalo Filter LLC for $365 million on a cash-free and debt-free basis. The buyout, expected to close in the first quarter of 2019, is likely to boost CONMED’s General Surgery segment, besides strengthening its surgical smoke evacuation portfolio.
For investors’ notice, New York-based Buffalo Filter is a globally recognized brand in surgical safety. The company’s surgical smoke evacuation portfolio includes smoke evacuation pencils, smoke evacuators and laparoscopic solutions.
Hence, the acquisition is likely to fortify CONMED’s foothold in the surgical smoke evacuation market.
Rationale Behind the Deal
Additionally, management at CONMED expects the acquisition to be neutral to the company’s adjusted earnings per share in 2019 and to be accretive by 10-15 cents in 2020.
Moreover, the buyout is expected to boost CONMED's organic revenues growth by 50 basis points (bps) over the long haul. Post 2019, the acquisition is expected to be accretive to the company’s gross margins.
Furthermore, adjusted operating margins are expected to improve 100 bps in the first year and an additional 100 bps by the third year.
Promising Surgical Smoke Evacuation Portfolio
CONMED’s ClearView Smoke Evacuation Unit, GoldVac and GoldVac Slim Smoke Evacuation Pencils are currently much in demand.
A research by MarketsandMarkets reveals that the global smoke evacuation system market is expected to reach $180 Million by 2020, at a CAGR of 5.6%. The rising demand for minimally invasive surgeries and a growing grey population are driving growth in the market.
Hence, the latest move has been a well-timed one for CONMED.
Another key player in the space is Stryker Corporation (SYK - Free Report) whose coveted Neptune E-SEP Smoke Evacuation Pencil provides a two-in-one solution for electrosurgery and smoke evacuation. Earlier in 2018, the company also acquired SafeAir AG, a Swiss medical device company with a view to reduce health risks related to surgical smoke.
Price Performance
Over the past year, shares of CONMED have rallied 34.8%, against the industry’s 2.3% decline. The current level also compares favorably with the S&P 500 index’s decline of 0.5%.
Zacks Rank & Key Picks
CONMED currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are, Integer Holdings Corporation (ITGR - Free Report) and OPKO Health, Inc. (OPK - Free Report) .
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock carries a Zacks Rank of 2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
CONMED's Buffalo Filter Buyout Likely to be Accretive in 2020
CONMED Corporation (CNMD - Free Report) recently announced a definitive agreement to acquire Buffalo Filter LLC for $365 million on a cash-free and debt-free basis. The buyout, expected to close in the first quarter of 2019, is likely to boost CONMED’s General Surgery segment, besides strengthening its surgical smoke evacuation portfolio.
For investors’ notice, New York-based Buffalo Filter is a globally recognized brand in surgical safety. The company’s surgical smoke evacuation portfolio includes smoke evacuation pencils, smoke evacuators and laparoscopic solutions.
Hence, the acquisition is likely to fortify CONMED’s foothold in the surgical smoke evacuation market.
Rationale Behind the Deal
Additionally, management at CONMED expects the acquisition to be neutral to the company’s adjusted earnings per share in 2019 and to be accretive by 10-15 cents in 2020.
Moreover, the buyout is expected to boost CONMED's organic revenues growth by 50 basis points (bps) over the long haul. Post 2019, the acquisition is expected to be accretive to the company’s gross margins.
Furthermore, adjusted operating margins are expected to improve 100 bps in the first year and an additional 100 bps by the third year.
Promising Surgical Smoke Evacuation Portfolio
CONMED’s ClearView Smoke Evacuation Unit, GoldVac and GoldVac Slim Smoke Evacuation Pencils are currently much in demand.
A research by MarketsandMarkets reveals that the global smoke evacuation system market is expected to reach $180 Million by 2020, at a CAGR of 5.6%. The rising demand for minimally invasive surgeries and a growing grey population are driving growth in the market.
Hence, the latest move has been a well-timed one for CONMED.
Another key player in the space is Stryker Corporation (SYK - Free Report) whose coveted Neptune E-SEP Smoke Evacuation Pencil provides a two-in-one solution for electrosurgery and smoke evacuation. Earlier in 2018, the company also acquired SafeAir AG, a Swiss medical device company with a view to reduce health risks related to surgical smoke.
Price Performance
Over the past year, shares of CONMED have rallied 34.8%, against the industry’s 2.3% decline. The current level also compares favorably with the S&P 500 index’s decline of 0.5%.
Zacks Rank & Key Picks
CONMED currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are, Integer Holdings Corporation (ITGR - Free Report) and OPKO Health, Inc. (OPK - Free Report) .
Integer Holdings has an earnings growth rate of 31.2% for the next quarter and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
OPKO Health’s long-term earnings growth rate is projected at 12%. The stock carries a Zacks Rank of 2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>