Did Wright Medical Make The Right Move? (SeekingAlpha)
Summary
Wright Medical Group announced a merger with Tornier to create a major player in the higher-growth extremities segment of orthopedics.
Wright Medical also announced the receipt of an approvable letter from the FDA for its much-harried orthobiologic product Augment.
With the potential for Wright Medical and Tornier to become a $2 billion company with leading share in upper and lower extremities, Wright Medical looks undervalued below the high $30s.
Four months ago, I fretted that Stryker's (NYSE:SYK) acquisition of SBi reduced the pool of eligible buyers to acquire Wright Medical Group(NASDAQ:WMGI) and/or Tornier (NASDAQ:TRNX). A lot of bullishness on these companies was based on their attractiveness as M&A targets for larger ortho companies, but the two companies have instead decided to come together to create a leading enterprise in the fast-growing extremities segment.
I have mixed feelings on this move as a Wright Medical Group shareholder. Wright Medical's somewhat disappointing third quarter sales result suggests that there's still more self-improvement to be done and Tornier has been working through sale...
