UPDATE 1-Symmetry Medical to sell orthopedic component business for $450 mln
(Adds details, share move)
Aug 4 (Reuters) - Symmetry Medical Inc said it would sell its orthopedic device component business to privately held Tecomet Inc for $450 million.
The company's shares jumped as much as 13 percent in early trading on Monday, to be among the top percentage gainers on the New York Stock Exchange.
Symmetry Medical will transfer ownership of its remaining surgical instruments business to its shareholders as a new company.
The split will help the surgical instruments business pursue its market better, without any clash of interest with customers of its original equipment manufacturer (OEM) business, Symmetry Medical said.
"Symmetry's OEM business makes implants and other devices for large orthopedic manufacturers. Having a surgical instruments business that sells directly to hospitals could make them a potential competiton to the OEM business. So it makes sense to sell it," Piper Jaffery analyst Matt Miksic said.
Shareholders will receive one share in the new company, after the spin-off, for every four Symmetry Medical shares currently held.
The sale of the OEM business, a provider of implants, instruments and sterilization cases to orthopedic device makers, will fetch Symmetry Medical $7.50 per share after paying fees and debt.
The OEM business contributed about 80 percent to Symmetry Medical's second-quarter revenue, growing at nearly 5 percent. Revenue from the company's surgical equipment revenues declined about 9 percent.
Stifel was Symmetry Medical's exclusive financial advisor, while Ropes & Gray LLP was its legal counsel. (Reporting By Amrutha Penumudi,; Editing by Joyjeet Das)