The proposed merger between spine companies Globus and NuVasive seems timely, albeit high risk. Globus will have to display its prowess for operational excellence to navigate the deal’s enormous multiyear disruptions and overcome distrust even as competitors circle. NuVasive has yet to convince its shareholders that an offer they consider is in their best interest.
Globus Medical’s proposed buyout of NuVasive, announced in February, was hardly a surprise. Given rumors of talks last year between the companies, and the inherent appeal of top-ranked spine companies consolidating in a fragmented, commoditized industry, Globus is betting that, once the near-term complexities and headwinds are overcome, its strategy will be rewarded.
Yet, the road will be hard. The proposal met widespread skepticism from investors and caution from industry veterans, who are speculating on the inevitable fallout amid marketplace uncertainties. At the Canaccord Genuity Orthopedic meeting for investors, held March 7 in conjunction with the annual meeting of the American Academy of Orthopaedic Surgeons (AAOS), competitors were edgy and even slightly gleeful about the prospects for a subsequent shakeout in the industry.