Enovis to acquire LimaCorporate S.p.A.

Enovis Corporation announced a definitive agreement to acquire LimaCorporate S.p.A., a privately held global orthopedic leader focused on restoring motion through an innovative portfolio of implant solutions. The acquisition has an enterprise value of approximately €800 million, consisting of a €700 million cash payment at closing and €100 million in shares of Enovis common stock.

Founded in 1945, Lima is a global orthopedic company with diversified revenues that has grown at a high single digit CAGR over the last 10 years, increasing into the low teens in the last several years. Lima’s pioneering technological solutions, including digital innovation and patient-tailored hardware, are developed to empower surgeons and improve patient outcomes following joint replacement surgery.

The addition of Lima will provide several compelling strategic benefits to Enovis including:

• Establishing a ~$1 billion revenue reconstruction business with approximately 50% of revenues in the fast-growing extremities markets
• Expanding international scale with a complementary global customer base and product mix
• Improving efficiency with state-of-the-art manufacturing facilities and a strong innovation engine
• Adding a complementary portfolio of proven surgical solutions and technologies, including 3D printed Trabecular Titanium and a comprehensive revision offering
• Creating robust cross-selling opportunities and approximately $40 million in cost synergies to be fully realized by year three after closing through supply chain optimization and cost consolidation
• Supporting Enovis’ long-term goals of high-single digit organic revenue growth and sustainable EBITDA margin expansion

“We are confident the acquisition of Lima will enable us to build on our strong growth trajectory and global leadership in orthopedic solutions to create immediate and sustainable value for our patients, customers, employees and shareholders,” said Matt Trerotola, Chair and Chief Executive Officer of Enovis. “With Lima’s complementary surgical solutions and customers, we will have the opportunity to enlarge our profitable recon portfolio and further expand our global presence. In addition, this acquisition will enable us to deliver enhanced financial results through significant cross-selling revenue growth opportunities and meaningful cost synergies.”

“Combining these two leading orthopedic businesses into one global platform creates an exciting opportunity to build on the strengths of both Enovis and Lima in developing patient-tailored devices and orthopedic products,” said Massimo Calafiore, Chief Executive Officer of Lima. “I look forward to working with the Enovis team to create even greater opportunities for growth and continued success.”

Transaction details
The €800 million transaction includes a cash payment of €700 million at closing, and €100 million in shares of Enovis common stock expected to be issued within 18 months after closing. Enovis plans to finance the cash portion of the consideration through a combination of cash on hand, availability under its existing revolving credit facility, and committed financing from UBS Investment Bank and J.P. Morgan Securities LLC.

The Company expects Lima to generate sales of $290-$300 million and $70-$75 million of adjusted EBITDA in 2024. The transaction is expected to be completed in early 2024, subject to the receipt of applicable regulatory approvals and customary closing conditions.

There is no change to Enovis’ previously announced 2023 full-year guidance, which contemplates organic sales growth of 7-7.5%, adjusted EBITDA of $262-$270 million and adjusted earnings per diluted share of $2.22-2.36. The Company expects the acquisition to be neutral to slightly accretive to 2024 adjusted earnings per share and accretive in 2025 and beyond.
MB Bureau