Medtronic Inc has completed its acquisition of China Kanghui Holdings, a provider of orthopedic devices in China. Under the terms of the agreement announced on Sept. 27, 2012, Medtronic will pay approximately $816 million in cash ($30.75 per American depository share). The total value of the transaction, net of Kanghui’s cash, is expected to be approximately $755 million. Kanghui’s shareholders approved the transaction at a meeting of the company’s shareholders held yesterday and all of the other conditions to the completion of the transaction have been satisfied.
“Kanghui is an excellent fit for Medtronic, accelerating our corporate strategies of globalization and economic value through a leading presence in China, a strong orthopedics product portfolio, and an exceptional management team,” says Chris O’Connell, executive vice president and president of Medtronic’s Restorative Therapies Group, including the Spine, Neuromodulation, Diabetes, and Surgical Technologies businesses. “The integration of Kanghui provides Medtronic a strong position in China’s rapidly expanding orthopedics segment, as well as a high potential platform for development of a global value segment in orthopedics.”
Kanghui will continue to be led by its current management team under Libo Yang, making it the first fully integrated Medtronic business unit headquartered outside the United States.
“We look forward to leveraging the scale and expertise of Medtronic to pursue growth opportunities in China and other emerging markets, as well as bringing our leading position, strong sales and marketing teams, and local manufacturing and R&D to the combined organization,” says Yang, vice president and president of the new Medtronic Kanghui business unit.
According to Medtronic, since its founding in 1997, Kanghui has become a leading Chinese manufacturer and distributor of orthopedic products. Its strong portfolio includes new products in trauma, spine, and joint reconstruction, and complements Medtronic’s existing leadership positions in the spine, neuromodulation, neurosurgery, advanced energy, and surgical navigation categories.