Exclusive: Surgical device maker ConMed Corp explores sale of company - sources
(Reuters) - ConMed Corp, a surgical device maker that has been fighting off activist investors, is exploring a sale and has contacted large medical device companies to gauge their buyout interest, people familiar with the matter said on Tuesday.
Utica, New York-based ConMed, which has a market capitalization of just over $1.2 billion, has been under pressure since late last year from activist investors who took issue with the company's performance and corporate governance.
In recent weeks, ConMed has asked its financial advisers, Bank of America Merrill Lynch and Greenhill & Co Inc, to approach larger orthopedic device makers regarding a potential sale of the company, the people said.
The process is at an early stage and there is no guarantee that a buyer will emerge, cautioned the people, who asked not to be named because the matter is not public.
Shares of ConMed were up 6.3 percent at $44.89 on Tuesday afternoon following the news that it was exploring a sale process.
ConMed said in an emailed statement: "As a matter of policy, CONMED does not comment on rumors or speculation. CONMED's Board of Directors and management team remain focused on creating value for shareholders."
Bank of America declined to comment, while Greenhill did not immediately respond to requests for comment.
The decision to explore a sale comes as the company anticipates a tough proxy battle at its annual shareholder meeting expected to occur by the end of July.
Voce Capital Management LLC, which sent a letter to ConMed's board in November urging it to consider a sale, nominated four candidates to the board. Separately in February, ConMed settled with another activist investor, Coppersmith Capital, by adding two of its nominees to the board and replacing the chairman.
ConMed has an attractive orthopedics and sports medicine business that could appeal to companies such as Zimmer Holdings Inc, Johnson & Johnson, Stryker Corp, Covidien Plc and Medtronic Inc, according to the people familiar with the matter.
But it also makes devices for other areas such as general surgery, gynecology, neurosurgery and gastroenterology, and the diverse product lines could present a challenge in trying to find a buyer for the entire company, one person said.
In February, British medical device maker Smith & Nephew Plc agreed to acquire ArthroCare Corp for $1.7 billion in the first major medical device deal of the year.
ConMed, which has roughly 3,600 employees, has a direct selling presence in 16 countries outside the United States and international sales represent roughly half of the company's total sales, according to its website.
ConMed CEO Joseph Corasanti serves on the company's board with his father, Eugene Corasanti, who founded the company in 1970. The elder Corasanti stepped down as chairman of the board in February and was replaced by independent board member Mark Tryniski.
(Reporting by Soyoung Kim and Olivia Oran in New York; editing by Matthew Lewis)