Medtronic to buy bone graft company Osteotech for $123 million

Medtronic, the world's largest medical devices maker, yesterday disclosed plans of buying Osteotech Inc, a bone graft company for $123 million.

Founded in 1986 and based in New Jersey, Osteotech is a global leader in the processing of human bone and connective tissue for transplantation and an innovator in the development, manufacturing, and marketing of biologic, biomaterial, and device systems for musculoskeletal surgery. It specialises on spinal, trauma, and total joint revision procedures.

The company is the world's largest processor of aseptic allograft bone tissue, yielding over 4 million grafts. Used in spinal fusions, to replace cancerous tissue, fill voids caused by trauma, augment prostheses, and replace damaged ligaments and tendons, bone tissues.

Osteotech says that over 500 transplant recipients every day use its products and its Grafton DBM technology-human tissue technology, used in musculoskeletal surgery, has been used in over 800,000 surgical procedures by more than 4,000 transplant professionals, worldwide.

For 2009, the company reported revenues of $ 96.7 million and made a net loss of $4 million.

Minneapolis, Minnesota-based Medtronic will pay $6.50 for each Osteotech share, a premium of 65 per cent to 16 August closing price. Osteotech's board of directors have unanimously approved the deal, although it remains subject to shareholder approval.