NuVasive a medical device company focused on developing minimally disruptive surgical products and procedures for the spine, announced that it has executed a definitive agreement for the purchase of Impulse Monitoring, a leading Intra-Operative Monitoring (IOM) provider in the United States.
Intra-Operative Monitoring is a long standing service which allows comprehensive procedural detection of neurological compromise and identification of functional neural structures during surgeries that involve spine, cardio, ENT, brain, and general orthopaedic. The IOM model employs highly trained neurophysiologists located in the operating room who function as part of the surgical team, assisting with patient preparation, administering neuro diagnostic testing, and working in partnership with supervising physicians who provide real time interpretation of the neurophysiological data. Neuromonitoring of the spine is 80% of Impulse Monitoring’s current case volume.
This acquisition will complement NuVasive’s existing nerve monitoring system, NeuroVision, which is designed for discreet and directional nerve avoidance and detection making lateral access to the spine during the extreme lateral interbody fusion (XLIF) procedure more safe and reproducible. The strategic move to acquire an IOM service provider will increase XLIF penetration and further drive lateral market share by increasing the number of neurophysiologists able to setup use of NeuroVision. Impulse Monitoring employs over 150 neurophysiologists while NuVasive has over 300 spine specialists in the field. As well, Impulse Monitoring will expand NuVasive’s presence into IOM services with a new revenue stream.
This strategic foray into the US$800 million market for Intra-Operative Monitoring opens up a significant revenue growth opportunity for NuVasive, as the company looks to expand Impulse Monitoring’s leadership position into a nationwide footprint. Today, only 50% of spine procedures undergo IOM. Over the next several years, the market for outsourced Intra-Operative Monitoring is expected to grow approximately 15% annually, and Impulse Monitoring has a proven track record of market leading growth.
Alex Lukianov, chairman and CEO of NuVasive, said, “We are excited to announce the acquisition of Impulse Monitoring, which will further differentiate NuVasive’s surgical solutions and will add value to hospitals, surgeons, and patients by procedurally integrating products and services. Our NeuroVision technology is the gold standard for allowing safe and reproducible lateral access to the spine, and we are particularly excited about the increased XLIF penetration opportunities that will be facilitated by this transaction.”
Gene Cattarina, CEO of Impulse Monitoring, said, “We are very pleased to combine our best in class neuromonitoring team with NuVasive’s best in class spine team. Together we will lead the advancement of safe and reproducible surgery and grow our presence nationwide. Our team looks forward to joining the NuVasive family and helping to expand our services to not only meet the needs of hospitals and surgeons, but also continue making important contributions to high quality patient care.”
In consideration for Impulse Monitoring, NuVasive will pay US$80 million, comprised of US$40 million in cash and US$40 million in stock, and subject to working capital, net debt transaction expenses, and equity value adjustments. The acquisition is expected to close in October, subject to customary closing conditions and government approvals.
Depending on when the transaction closes, NuVasive anticipates that Impulse Monitoring will contribute over US$8 million to fourth quarter 2011 revenue and is growing at an annual run rate approaching US$40 million.
