For a company that many investors are certain that the CEO is going to sell at some point in the not-so-distant future, Wright Medical (WMGI)
continues to show that it is very focused on building its business. To
that end, the company announced Monday morning that it would be
acquiring privately-held ortho implant company Cartiva
for $435 million in cash. Although Wright is paying a high price for
Cartiva, the valuation isn’t unreasonable relative to the growth and
Wright is adding an uncommonly profitable product with meaningful growth
potential.
Given the price Wright Medical is
paying, executing on this transaction is essential. While the
acquisitiveness of Wright could, perhaps, prompt some investors to
question the real underlying health of the company’s portfolio, I think
Cartiva was a rare opportunity for Wright Medical to meaningfully
augment its growth potential.
Read more here:
Wright Medical Does A Deal Both Opportunistic And Defensive
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