March 2, 2007 / 10:34 AM / 12 years ago

UPDATE 3-Swiss Straumann to buy etkon for 100 mln euros

(Adds effects on profit, predicted turnover in final paragraphs)

By Katie Reid

ZURICH, March 2 (Reuters) - Swiss dental implant maker Straumann (STMN.S) said on Friday it had acquired etkon, a German maker of false teeth, for 100 million euros ($132.2 million), which could boost its position in North America.

The friendly takeover is Straumann’s largest to date and will position the group as a “one-stop shop” by providing solutions such as bone augmentation as well as implants and prosthetics, the firm said.

“Overall it is a positive strategic move. They are copying the strategy of other major competitors, such as Nobel Biocare, by providing both implants and prosthetics,” said Vontobel analyst Christoph Gubler.

“The acquisition will eventually help their position in North America. Growth potential lies abroad, and one of the biggest markets is in the U.S. It is an important move to become a broader provider,” he said.

Straumann has struggled to match Nobel’s presence in the U.S., where fewer dentists have used implants than in Europe, making it one of the fastest-growing markets for dental implants.

Munich-based etkon is a leader in computer-aided design and manufacturing (CAD/CAM), which uses computers to scan models of patients’ mouths to provide customised bridges and crowns, using ceramics.

By 0849 GMT, shares in the group had risen 2.49 percent to 329.25 Swiss francs per share, outperforming a 0.75 percent rise in the Swiss mid-cap index .SMIM.

Dental implant makers have benefited from an ageing population and an increased consumer awareness of implants as an alternative to traditional false teeth and bridges.

The firm will pay 77 million euros up front for 77 percent of etkon’s shares at closure on March 8 and will buy the remaining 23 percent, which is held by investment funds, in the “near future”, bringing the total value of the deal to 100 million euros, the firm said.

The group said its strong free cash flow and liquidity of 172 million Swiss francs ($141.1 million) at the end of 2006 meant the deal could be completed in cash and that Straumann would still be in a position to make further acquisitions.

The acquisition will be accretive to cash earnings per share from 2007, Straumann said, though it would be dilutive at gross and EBIT margin levels, and it would also be dilutive to earnings per share in 2007 and 2008.

It said etkon sales in 2007 were expected to be 20-25 milllion euros.

((Reporting by Andrew Hurst and Katie Reid

Editing by Paul Bolding and Will Waterman

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