Smith & Nephew, a multinational healthcare company based in the United Kingdom, announced the acquisition of Healthpoint Biotherapeutics. The $782 million buyout of the wound care product manufacturer sparked mixed feelings among investors. While analysts approved of the company’s purchase, many felt that Smith & Nephew paid too much for the company.

According to a press release by Smith & Nephew, the company believes the buyout will help the company expand its market share in the wound care niche. This includes the market for fast-growing bioactive healthcare services like skin regeneration and wound treatment for diabetic ulcers.

Approximately 25 percent of Smith & Nephew’s business comprises wound care products. However, the company’s flagship products are replacement joints. Healthpoint, a privately-held company, has strong positions in dermal repair, bioactive debridement and regeneration products. During the 2012 fiscal year, these product lines brought the private company $190 million in total revenue. Smith & Nephew plans to integrate the private company's products into its own Advanced Wound Management division.

Olivier Bohuon is the CEO at Smith & Nephews. In response to criticism about the expensive buyout, he stated in prepared remarks, "We believe it's a fair price, it's a good price for acquiring such a growing business and such a future. It's really normal for deals done in this kind of field."

References

http://www.reuters.com/article/2012/11/28/us-smithnephew-idUSBRE8AR09B20...

http://www.smith-nephew.com/news-and-media/news/smith--nephew-to-acquire...