Zydus Lifesciences to buy 86% stake in Amplitude Surgical for Rs 2,430 cr

Zydus will file a mandatory cash tender offer for the remaining shares of Amplitude at the same purchase price of €6.25 per share

The board of directors of Ahmedabad-based Zydus Lifesciences on Tuesday approved the acquisition of a controlling 85.6 per cent stake in France-based orthopaedic technology firm Amplitude Surgical SA for €256.8 million (₹2,430 crore).

 

The pharma major will file a mandatory cash tender offer for the remaining shares of Amplitude at the same purchase price of €6.25 per share, potentially leading to a full acquisition valued at €300 million (₹2,850 crore) and subsequent delisting from Euronext Paris. 

 

The acquisition price represents an 80.6 per cent premium over the last closing price as of March 10, and premiums of 88.2 per cent and 92.2 per cent over the three-month and six-month volume-weighted average price of Amplitude Surgical, respectively. The transaction is subject to regulatory approvals, including clearance from France’s Economy Ministry. The deal is expected to close in the first half of this year.

 

 

Zydus Lifesciences' revenue reached ₹19,547 crore in FY24, and for 9MFY25, it posted a 19 per cent year-on-year (Y-o-Y) revenue growth to ₹16,713.6 crore, with Ebitda at ₹4,933 crore (up 31 per cent) and a net profit of ₹3,354.6 crore (up 25 per cent). The deal will be funded through a combination of debt and internal accruals.

 

A Mumbai-based analyst said Zydus has been trying to build a medtech business for some time as a diversification strategy, and the business is still in its nascent stage.

 

"Over the next 18–24 months, we expect revenues to grow from this segment as products get commercialised. The acquisition of Amplitude will give it geographical access," the analyst added.

 

Amplitude Surgical is a European medtech leader in lower-limb orthopaedic technologies, specialising in the design and development of knee and hip prostheses, which are implanted in place of damaged or worn-out joints.

 

Supported by PAI Partners, through its Mid-Market Fund, Amplitude Surgical has experienced significant growth over the last four years, driven by new product development, international growth, investments in manufacturing capabilities, and R&D.

 

In the financial year ended June 30, 2024, Amplitude Surgical generated sales worth €106.0 million and an Ebitda of €27.1 million on a consolidated basis under IFRS. For the six months ended December 31, 2024, Amplitude Surgical’s consolidated sales amounted to €51.5 million (a growth of 5 per cent Y-o-Y at current exchange rates) with an Ebitda margin of approximately 25.4 per cent (unaudited figures).

 

Sharvil Patel, managing director, Zydus Lifesciences, said: “We believe this is a natural extension into the field of medical technology. Our commitment to quality excellence, continuous investments in R&D, and expertise in manufacturing will guide our foray into highly specialised medtech products, adding a new dimension to our operations. In Amplitude Surgical, we see several medium-term and long-term growth opportunities in portfolio, capabilities, manufacturing, and geographies.”

 

Zydus may introduce Amplitude’s products to the Indian market. At present, Amplitude has no presence in India. The Indian orthopaedic limb implants market, valued at $791.4 million in 2023, is projected to reach $1,256.3 million by 2030, driven by factors such as an ageing population and an increase in orthopaedic disorders.

 

As such, the deal will be EPS-accretive from Day 1, and Amplitude has a cash flow of €27 million along with surplus capacities. Therefore, no additional capital expenditure is required at the moment.

 

Patel said the medical devices sector is a "sunrise" industry, with a significant gap between imports and exports in India, creating a huge opportunity. Zydus MedTech, the company’s medical devices division, now has over 130 employees, and Patel expects this to become a "sizeable business" within the next five years.

 

Apart from orthopaedics, Zydus’ other two focus areas in medical devices are nephrology and interventional cardiology. It already has a presence in cardiac stents through its acquisition of certain assets of Nano Therapeutics and is also exploring further collaborations in this area. Meanwhile, the company is developing dialyser membranes at its facility, which are expected to be commercialised in about 18 months.

 

Patel added that the medical devices and technology sector is a "sticky business" and "highly profitable".

 

Medical technology includes medical devices and related scientific infrastructure that directly contribute to the development of these products and solutions.

 

The medical device market alone is estimated at over half a trillion dollars globally. This market is broadly divided into segments such as implants, equipment, consumables, and in-vitro diagnostics.

 

Olivier Jallabert, CEO and founder, Amplitude Surgical, said: “The Amplitude Surgical team and I are delighted to join Zydus. This acquisition by a global healthcare leader is a testament to the successful development of the company over the last 25+ years, from a national orthopaedics challenger to a European leader.”

 

Stefano Drago, a founding partner of PAI Mid-Market Fund, PAI Partners, said Amplitude Surgical is a European leader in lower-limb orthopaedics and has delivered strong financial performance through continuous product development. It successfully disposed of a non-core business, streamlined operational processes, and developed a new state-of-the-art manufacturing facility in France, along with an innovative surgical robot. 

EXPANDING PRESENCE

 

*  The deal is expected to close in the first half of this year

 

*  Zydus may bring in Amplitude’s products to the Indian market

 

*  Apart from orthopaedics, Zydus focuses on nephrology and cardiology