Smith+Nephew Completes Integrity Orthopaedics Deal, Adding Tendon Seam Rotator Cuff System

Smith+Nephew said on Wednesday, January 21, that it had completed its acquisition of Integrity Orthopaedics, the Maple Plain, Minnesota, developer of the Tendon Seam rotator cuff repair system, nine days after announcing the deal, according to a filing with the US Securities and Exchange Commission.

The company paid an initial $225 million in cash and agreed to performance-based payments of up to $225 million more over the next five years, bringing the potential deal value to $450 million.

Deal terms

Smith+Nephew said in its January 12 signing announcement that the acquisition would be financed from existing cash facilities and that the group would remain below its leverage target of two times EBITDA. It said the transaction is expected to be accretive to group trading profit margin by 2028.

The company described the purchase as part of its RISE strategy and as a building block in its ambition to become the global leader in sports medicine.

Integrity Orthopaedics was founded in 2020. Its founders include Tom Westling, a co-founder of Rotation Medical, which developed the REGENETEN bioinductive implant and was acquired by Smith+Nephew in 2017, according to the announcement and ORTHOWORLD.

Scott Schaffner, president of sports medicine at Smith+Nephew, said the company now has "an unrivalled portfolio for shoulder, including a powerful next-generation rotator cuff repair platform to complement market-leading biological augmentation."

The Tendon Seam system

Tendon Seam uses patented micro-anchors, a continuous suture, individually locked stitches and an integrated implantation instrument, which Smith+Nephew said are designed to give stronger repairs, faster recovery, lower re-tear rates and a simpler surgical technique. The company said early clinical experience indicates low re-tear rates, shorter sling times and shorter procedures than standard methods, citing data on file at Integrity Orthopaedics rather than a published study.

The system received 510(k) clearance in 2023 and is indicated for reattachment of soft tissue to bone, including tendons, ligaments and joint capsules. It is currently available in the United States, according to the completion release, which was distributed by GlobeNewswire and read via BioSpace.

About 500,000 rotator cuff repairs are performed each year in the US, a market Smith+Nephew valued at an estimated $875 million, citing SmartTRAK. The company said traditional techniques have structural failure rates averaging 20% to 40%, citing a 2015 study in the journal Arthroscopy.

Smith+Nephew said it plans to speed adoption of Tendon Seam through its US commercial channels, as it did after buying REGENETEN, while building evidence to support use outside the US. Tom Westling, Integrity's chief executive, said Smith+Nephew's "track record launching innovative products, which I experienced firsthand with REGENETEN" gave him confidence in the combination.