Wright Medical Group to expand foot products

$27.7 million for Calif. surgery product firm

The Commercial Appeal
March 8, 2008
By Daniel Connolly

Arlington-based medical device maker Wright Medical Group said it plans to spend at least $27.7 million to buy Berkeley, Calif-based INBONE Technologies Inc., a maker of products for foot and ankle surgery.

The figure includes a $24 million cash payment and guaranteed minimum future payments of $3.7 million. Wright said it may pay more depending on the future performance of the company.

The acquisition is its biggest in years and is in keeping with executives' goal of making the firm the world leader in the foot and ankle surgery niche.

With $386.9 million in revenue in 2007, Wright is a mid-sized player in the orthopedics field and the smallest of the big three medical device companies in the Memphis area. Its managers have said they hope to grow by dominating niche areas.

Wright made several foot and ankle acquisitions last year. They contributed to a striking 38 percent year-over-year increase in sales of surgical products for human extremities, which include the wrist, feet, ankle and shoulder. Starting early last year, the firm reorganized its U.S. sales force so that some field representatives specialize in foot and ankle products.

Wright prepared to make more acquisitions by raising $193.5 million through debt instruments called convertible senior notes.

"The INBONE acquisition represents a key milestone in our effort to become the leading supplier of foot and ankle surgical products," Wright president and CEO Gary D. Henley said in a statement.

One of INBONE's key products is its total ankle replacement, helping patients with deformity due to trauma or disease. It can also help patients who have had a failed implant surgery.

The product is relatively new. INBONE announced in January that surgeons had completed the 200th implantation.

Contact Daniel Connolly at 529-5296.

Recent acquisitions

October: Wright spends $2.5 million to buy the Bio-Arch products from Houston-based Metasurg.

April: Wright pays $8 million for rights to sell several foot and ankle surgery products made by Pennsylvania-based R&R; Medical Inc.

March 2007: Wright pays $17 million for the foot and ankle division of Huntington, W. Va.,-based Darco International Inc. It is Wright's first acquisition in years.

Feb 2007: Wright agrees to cooperate with Alachua, Fla.-based Regeneration Technologies Inc. to develop cow bone implants for foot and ankle surgeries. The firms didn't disclose terms.