Smith & Nephew closes $275m Blue Belt buy

Smith & Nephew (NYSE:SNN) said today that it closed its $275 million acquisition of robot-assisted surgery company Blue Belt Technologies.

Minneapolis-based Blue Belt makes the portable Navio system, which is designed to work with 8 different knee systems, including Smith & Nephew’s Zuk and Journey Uni devices. The London-based medical products giant, noting that Blue Belt is its “most successful” implant sales partner, has said it plans to continue to support implants from other manufacturers with the Blue Belt system.

Today Smith & Nephew said it also plans to expand the Navio platform into total knee, bi-cruciate retaining knee and revision knee implants, “delivering significant further upside.”

“Our experience working with Blue Belt Technologies and our customer insight has convinced us that robotics will become increasingly mainstream across orthopedic reconstruction in the foreseeable future,” Smith & Nephew CEO Olivier Bohuon said when the deal was announced in October 2015. “This acquisition is a compelling strategic move, with the combination of complementary products and R&D programs creating a platform from which we can shape this exciting new area of surgery. It reinforces our distinctive orthopedic reconstruction strategy, which combines cutting edge innovation, disruptive business models and a strong emerging markets platform to drive outperformance.”

A total knee system is slated to launch in 2017 for its Journey II implant, Smith & Nephew said last year, and a revision knee system is in the pipeline. Blue Belt’s development program for a bi-cruciate-retaining implant will be incorporated into the British company’s own bi-cruciate-retaining knee arthroplasty program, the Journey II XR implant. Total hip arthroplasty and adjacencies including sports medicine are also on the horizon, the company said at the time.

Blue Belt’s medium-term revenues are expected to grow at a 50% clip from their $19 million level now, but R&D expenses are forecast to dilute trading profit margin by roughly 60 basis points next year, Smith & Nephew has said. Blue Belt employs about 120 workers in Minneapolis, Pittsburgh and Manchester, U.K.

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