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JNJ looks to acquire trauma surgery equipment company

By: News
Posted: 4/17/2011 12:30:00 PM
Referenced Stocks: JNJ

Johnson & Johnson ( JNJ ) is reportedly nearing an acquisition of a Swiss manufacturer of trauma surgery equipment, which one knowledgeable source said represents the company's "gaping hole."

The Wall Street Journal reports the acquisition for Synthes (SYST) would run about $20 billion, which would the biggest acquisition ever. The purchase would revive JNJ's medical device interests, which - like other companies' - has slumped in recent years because of the economic recession.

"It's the gaping hole in [JNJ's] orthopedic portfolio, so Synthes really is a good match for them," an unnamed source described as familiar with the industry told the publication. Synthes "pretty much built the trauma market."

Acquisition discussions between the two companies are tenuous and no time frame has been set, according to unnamed sources cited by the publication.

Orthopedic devices represent a $28.3 billion market and the company with headquarters in Switzerland and the U.S. generates almost half of the plates and screws used to repair broken bones. Dupuy, a JNJ unit, sells those type of plates and screws but not on a scale anywhere near Synthes or two other rivals.