Tornier-Wright Merger Takes Major Step Forward

The Federal Trade Commission has agreed to the sale of Tornier’s U.S. rights and assets related to its total ankle and total silastic toe joint replacements to Integra Lifesciences. The move came ahead of a vote by Wright Medical Group and Tornier to combine.

The pair announced last month that they would sell rights to these orthopedic devices to Integra, as the FTC had maintained that the proposed $3.3 billion merger would reduce competition for these products.

Under a proposed order, which will be open for public comment until Oct. 30, Wright and Amsterdam-based Tornier will supply Integra with the ankle replacements for up to three years and the toe joint replacements for one. Integra also will receive the intellectual property, manufacturing technology and existing inventory under the FTC proposal.

Following the closure of the comment period, the FTC will make its final decision on the deal. The companies expect to close the merger by the end of the year.

According to an FTC analysis, Wright and Tornier dominate the total silastic big toe joint replacement market, holding 60 percent and 38 percent, respectively.

There is more competition in the total ankle replacement market, with Wright, Tornier, and Stryker accounting for 44 percent, 19 percent and 31 percent of 2014 sales, respectively.

At least one analyst sees the combined company, which will be known as Wright Medical Group N.V., as an attractive target in the long term. “[W]e believe the new Wright will prove quite compelling from a takeout perspective to one of the larger orthopedic players and eventually find a suitor,” writes Ben Andrew with William Blair & Company Equity Research. — Elizabeth Hollis