Symmetry Surgical, a subsidiary of orthopedic implants and instruments maker Symmetry Medical, Inc. , recently signed a distribution agreement with a leading medical device distributor, MTG Medical Technologies (MTG). Per the terms of the deal, MTG will distribute Symmetry Surgical’s surgical instruments product portfolio in Europe.
MTG, a subsidiary of Neuro-Competence, distributes cutting-edge yet affordable medical devices to hospitals located across Germany, Austria, Switzerland, Czech Republic, Hungary and Slovakia. Given MTG’s strong presence in these countries, the partnership will enable Symmetry Surgical to grow its customer base in the European market.
The distribution agreement is in line with Symmetry Surgical’s focus on worldwide expansion of its business inclusive of all brands under the erstwhile Codman Surgical Instruments and SSi. The company further plans to expand into other key European countries to attract healthy revenue opportunities.
Since Symmetry Medical’s core Original Equipment Manufacturing (“OEM”) Solutions business is facing declining capital spending, procedural and pricing pressure from the weak global orthopedic market, the company is focused on expanding its smaller Symmetry Surgical business.
In the last reported third quarter 2012 results, revenues from the smaller Symmetry Surgical unit increased more than twofold to $24.8 million in the quarter, buoyed by the Olsen Medical and Codman & Shurtleff, Inc. acquisition, which contributed roughly $13.7 million to the division’s sales.
Earlier, in October, Symmetry Surgical had entered into a distribution agreement with Canada-based AMT Electrosurgery Inc. to distribute its entire portfolio of medical devices in Canada. In June, Symmetry Surgical had completed a distribution agreement with Japan Surgical Specialty (‘JSS’) Corporation to sell its products in the Japanese market. The company had also completed a distribution agreement to directly distribute its offerings in Australia and New Zealand.
Symmetry Medical is the largest OEM provider of implants and related surgical instruments and cases to orthopedic devices manufacturers. Its major customers include Johnson & Johnson’s (JNJ - Analyst Report) DePuy, Stryker Corporation (SYK - Analyst Report) and Zimmer Holdings, Inc. .
Currently, we have a Neutral recommendation on the stock, which retains a short-term Zacks #3 Rank (Hold).