Zydus eyes global medtech foray with €257 mn acquisition of Amplitude Surgical | Company Business News-OxBig News Network

Zydus Lifesciences has entered exclusive negotiations to acquire a controlling stake in France-based medtech firm Amplitude Surgical SA for €256.8 million, the drugmaker said on Tuesday, as it seeks to foray into the global medical devices market.

Zydus is looking to acquire an 85.6% stake in Amplitude Surgical from PAI Partners and the orthopaedic products maker’s management, as well as two minority shareholders, following which the Ahmedabad-based pharma company will make a mandatory cash offer for the remaining shares, valuing the potential full acquisition at €300 million.

“With this, we will be making a foray into the global medtech space,” managing director Sharvil Patel said at a virtual press conference. “We want to offer services beyond just medicines, so whether it is medical devices which are highly technologically oriented or companion diagnostics…areas where we feel better patient outcomes can be seen,” he added.

Following the mandatory cash tender offer, and potential full acquisition of the company, Amplitude would be delisted from the Euronext Paris stock exchange.

Zydus’s offer price of €6.25 per equity share represents an 81% premium to Amplitude’s last close.

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Amplitude Surgical is a leading French player in the global market for surgical technologies for lower limb orthopaedics and develops high-end products for orthopaedic surgery, covering the main pathologies affecting the hip and knee. Supported by Paris-based private equity firm PAI Partners through its Mid-Market Fund, Amplitude Surgical has experienced significant growth over the past four years.

In the fiscal year ended 30 June 2024, Amplitude Surgical generated sales of €106 million and earnings before interest, taxes, depreciation and amortization (Ebitda) of €27.1 million, the company said.

The Zydus Lifesciences stock closed about a percent higher at ₹901.50 on the NSE on Tuesday.

Sunrise sector opportunity

Zydus sees significant opportunity for growth of the medical devices, both domestically and overseas, and is eyeing three segments—orthopaedics, interventional cardiology and nephrology.

“Today, there is a high burden of import versus export [in India] and there is a big skew towards a large amount of imports related to medical devices and medical technology,” Patel said, adding that while India’s exports are growing, there is still a large opportunity to scale up.

India’s medical devices exports rose at a compound annual growth rate of 14% from fiscal year 2020 (FY20) to reach $3.8 billion in FY24, according to a report by EY released in November.

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The country, however, continues to remain a net importer of medical devices, shipping in 80-85% of its domestic requirements. In FY24, India’s medical devices imports reached $8.2 billion, marking a 13% increase from the previous year, and more than twice the value of total exports.

“Today, there are a few medical devices companies, but really none that have achieved the scale and size that one would like to do…I think over the next 5-7 years, we see a significant opportunity to grow and build a very sizable medical device in these three areas that we mentioned, both via organic as well as inorganic means,” Patel said.

While Amplitude Surgical’s operations are based in Valence, France, and offers Zydus inroads into high-tech orthopaedic medical devices, the company is already in the process of building capabilities for cardiology and nephrology in India.

Zydus has also acquired a facility for manufacturing stents, “And we have started commercialization of the interventional cardiology stents…further on, we hope to build a new R&D (research and development) science product out of that with drug-eluting stents and other areas,” Patel said.

Drug-eluting stents are coated with medication to prevent arteries from getting blocked all over again.

Within nephrology, the company is establishing a dialyser manufacturing plant, Patel added. “We know there is a strong global burden on CKD (chronic kidney disease)… We are a very relevant and large player in CKD,” he said.

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The company will leverage its global presence in pharmaceuticals to launch its medtech play. “Because of our global footprint in multiple geographies, we believe that we could launch multiple markets with our products, and we have the learnings of doing this business in many developing markets,” Patel said.

Zydus has manufacturing sites and research facilities across Gujarat, Maharashtra, Goa, Himachal Pradesh and Sikkim, and serves key geographies such as the US, Europe, Latin America, South Africa and emerging markets.