US company Dentsply International secured a bigger bite of the global dental market by buying AstraZeneca’s dental implants and medical devices unit Astra Tech for US$1.8 billion.
Dentsply, which beat off bids from rival medical technology groups and private equity firms, said yesterday the acquisition would increase its revenue by around a quarter and be accretive to earnings immediately.
Swedish-based Astra Tech, which had revenue last year of US$535 million, is the world’s third-largest dental implants maker after Straumann and Nobel Biocare. It has a separate medical devices arm focused on urology and surgery.
Acquiring Astra Tech will strengthen Dentsply’s leading position in the global dental market, while for AstraZeneca the disposal reinforces its role as a “pure play” pharmaceuticals company at a time when many rivals are diversifying.
AstraZeneca chief executive David Brennan said the auction process, run by JPMorgan, had attracted “a high degree of interest.”
However, the price was short of the US$2 billion figure some analysts had been expecting.
The deal, expected to close in the second half of the year, will not hit AstraZeneca’s core earnings this year, but will provide extra resources for the British drugmaker to improve returns.
Pennsylvania-based Dentsply said the transaction was expected to boost adjusted earnings per share by US$0.12 to US$0.17 in the first full year and by US$0.30 to US$0.40 by the third year, including the benefits of sales and operational synergies.
Dentsply chairman and chief executive Bret Wise said the deal would more than double his company’s position in dental implants, while urology and surgery provided additional growth opportunities.