Globus Medical and NuVasive Agree to $3.1B Merger

On Thursday of last week, Globus and NuVasive announced their decision to enter into a definitive agreement combining the two companies in an all-stock transaction. The deal was unanimously approved by the boards of both companies last week, with NuVasive shareholders receiving 75% of a share of Globus Medical Class A common stock for each share of NuVasive.

The deal is expected to close in the middle of 2023, subject to final approval by regulators and shareholders. When finalized, the combined company will be second only to Medtronic regarding its market share in spinal surgery products. According to the merger announcement, NuVasive shareholders will own 28% of the combined company, and Globus Shareholders will own almost 72%.

"This transaction reflects our mission to become the leading musculoskeletal technology company in the world by developing products that promote healing in patients with musculoskeletal disorders," said Dan Scavilla, president and chief executive officer of Globus Medical.

When news of the merger hit the market last week, Globus Medical’s stock immediately dropped 18% and has stayed down for almost a week. Analysts familiar with the deal worry that cultural differences between the two firms could hamper the merger process, and the new sizeable spine-focused company will be difficult for executives to control.

"Our combination with Globus Medical is transformative, joining two companies with highly complementary capabilities, geographic footprints, and customer bases," said NuVasive CEO Chris Barry in the announcement. "Together, we will be able to offer an exceptional portfolio of clinically proven solutions supported by strong commercial and surgeon education teams. The new company will be well-positioned to deliver value creation for shareholders, further support our surgeon partners — and most importantly, change the lives of more patients."

The merger is a move to accelerate the globalization of each company’s portfolio and expand its reach across the $50 billion musculoskeletal market. Both companies sell a similar suite of spine and orthopedic products, which they hope to combine into a set of comprehensive technological solutions for surgeons. The team at NuVasive specializes in creating medical devices for degenerative diseases of the spine. As a “comprehensive spine company” it offers products and procedural solutions that can address eight medical conditions, and it also provides surgeon education through an internal clinical professional development unit.

Headquartered in San Diego, California, NuVasive employs around 2,900 employees across its 25 global locations, netting $1.14 billion in sales during 2021. Pennsylvania-based Globus had annual revenue of $958 million in 2021.