Spine’s Evolving M&A Landscape
The orthopedic industry never ceases to amaze. Like most of healthcare nowadays, orthopedics is constantly evolving; as such, changes are to be expected. But few industry professionals could (or would) have predicted the enormous shifts that have transpired in the spine sector over the last five years. The landscape is almost unrecognizable.
Not surprisingly, many of the changes have been spawned by the industry’s major players. Whether through mergers and acquisitions or spinoffs, the spine sector looks significantly different than it did in 2020. A brief dive into each of the major market-impacting moves follows.
Stryker: Historically, Stryker Corp. has been one of the industry’s most aggressive growth-oriented companies (organically and inorganically) and one of the world’s biggest medical device manufacturers. It ranked fifth on MPO’s Annual Top 30 Medical Device companies list last year—up two spots from its 2023 position and four places from its 2021 classification—and first on ODT’s Top 10 list. Such high rankings make Stryker’s recent (January) decision to spin off its spine division all the more surprising. New York City-based investment firm Viscogliosi Brothers LLC is purchasing Stryker’s U.S. spinal operations and relaunching it as an independent venture named VB Spine LLC. Viscogliosi also retains the right to buy Stryker’s spine business in France.
VB Spine will become a strategic partner to Stryker, procuring exclusive access to its Mako Spine robotics and Copilot guidance software. Wise move on Stryker’s part, as the firm has made significant investments in its Mako robotic assets and corresponding hardware and software technologies.
This move reflects a broader industry trend where large medtech firms divest underperforming or non-core businesses to streamline operations and focus on high-growth areas. Stryker’s spine division—while significant—apparently was not aligning with Stryker’s strategic priorities, particularly in robotics, digital surgery, and its efforts in Sports Medicine. A spinoff allows the spine unit to operate with greater agility under private equity ownership, which may generate more targeted investments and operational efficiencies.
ZimVie/Highridge Medical: After its combination with Biomet a decade ago, Zimmer Biomet Holdings Inc. has become a key player in orthopedics, as evidenced by its third-place ranking on ODT’s Top 10 Companies list last year and its placement at number 17 on MPO’s Top 30 list. Like its rival Stryker, however, Zimmer Biomet also divested its spine business, separating its spine and dental divisions into a new standalone company, ZimVie, in 2022. The move was designed to allow both Zimmer Biomet and ZimVie to focus on their respective markets, with the latter ultimately establishing itself as an independent player in spine.
Despite the best intentions, Zimmer Biomet’s plans for ZimVie didn’t pan out, as ZimVie sold off its spine unit to H.I.G. Capital last year for $375 million. Now rebranded as Highridge Medical, this new smaller and more nimble spine group will have to fight to gain traction in a competitive and increasingly crowded spine market.
This Zimmer–ZimVie–Highridge separation highlights the growing preference among some large medtech firms to create specialized, focused companies rather than managing sprawling portfolios. It’s still too early to determine whether this strategy is successful.
Globus-NuVasive: Until Stryker spun off its spine division, one of the most significant industry transactions was Globus Medical Inc.’s $3.1 billion merger with NuVasive Inc., which was completed in 2023. By uniting, the combined company became the eighth largest orthopedic company (revenue-wise), according to ODT’s 2024 Top 10 list. If this newly integrated firm can execute commercially, it potentially could become a spine technology powerhouse, leveraging Globus Medical’s strengths in robotics and implants with NuVasive’s expertise in minimally invasive spine surgery.
In market terms, this merger allows for increased scale, a more comprehensive product portfolio, and the opportunity to drive further innovation (depending on the combined company’s willingness to fund it). The merger has triggered significant layoffs, so it remains to be seen where the company decides to focus and how it’s able to execute commercially. Combining sales and marketing entities is never simple.
Orthofix-SeaSpine: The October 2022 merger between Orthofix and SeaSpine created a spine market contender that was ranked tenth on ODT’s Top 10 list last year. By joining forces, these two companies created a more diversified spine and orthopedics company that is valued at $693 million and boasts a portfolio that spans spinal fusion devices, biologics, and bone growth stimulators. Its main focus, however, is spine, which will help the company become an effective market competitor.
The merger aimed to create synergies through combined research and development, better distribution networks, and enhanced innovation capabilities. Unfortunately, the merger’s initial momentum was hampered by a year of C-suite musical chairs (the company fired its top three executives—CEO, CFO, and CLO—for cause after an investigation concluded they violated multiple codes of conduct). With that ugly chapter safely in the rearview mirror, Orthofix must now focus on implementing its game plan to gain scale and improve its financial performance enough to gain admittance into the large spine manufacturers club.
Medtronic: The world’s largest medical device manufacturer (number one on MPO’s Top 30 list) ranks fifth among the top 10 orthopedic implant firms, according to ODT’s analysis. Interestingly, Medtronic owes its postion on the top 10 list to spine (it is ranked fifth among the 10 largest orthopedic firms). As a market leader, Medtronic has historically remained an active player in spine M&A, having acquired Mazor Robotics for $1.7 billion in 2018 to bolster its spine surgery offerings.
With its rivals’ spine-related M&A tactics, Medtronic is not being complacent. It continues to pursue strategic partnerships and acquisitions to stay at the forefront of spinal innovation. The company’s focus on robotics, navigation, and digital health solutions keeps it positioned as a major force in the industry. And perhaps more importantly, as the spine surgery battlefield moves to the ambulatory surgery center (ASC), Medtronic appears to be ready.
Now, for some observations of macro-level spine segment activities.
Ownership dynamics is occurring on two levels. For starters, large medtech firms are prioritizing their core business areas, spinning off divisions that no longer align with their long-term strategies. Spine manufacturing—while lucrative—often requires specialized attention and resources that do not fit within the broader goals of diversified medical device firms.
Private equity firms are taking advantage of some of these strategic portfolio adjustments by investing in spine companies, having long been attracted by the sector’s growth potential and technological advancements. The decision to spin off spine divisions to private equity firms (demonstrated by Stryker and Zimvie) reflects a broader market shift by specialized investment firms to build high-value, standalone companies. Some P.E. firms are also having an impact by providing capital to mid-sized manufacturers, enabling expansion, operational improvements, and greater R&D investment.
The spine sector’s future is highly dynamic and will be exciting to watch unfold for several reasons. First, as competition intensifies, mid-sized spine firms may continue to merge or be acquired by larger players. The Trump administration’s “hands-off” regulatory philosophy may allow for some combinations that may not have been possible under President Biden’s watch.
Additionally, the future of spine manufacturing will be heavily influenced by digital health solutions, robotics, and artificial intelligence-driven surgical planning. Strategic partnerships between spine companies and technology firms may accelerate innovation in these areas.
And finally, there will continue to be greater focus on outpatient services and the ASC markets. As ASCs become a larger part of spine care delivery, manufacturers will need to adapt their business models. As a result, companies investing in minimally invasive solutions and cost-effective technologies will be well-positioned for growth.
The spine sector is undergoing a significant ownership transformation driven by M&A activity, strategic divestitures, and private equity investments. Companies are streamlining operations, seeking scale, and prioritizing innovation to remain competitive. This highly dynamic industry is poised for further evolution, which will contribute to better patient outcomes. Change is the best way forward.
MORE FROM THESE AUTHORS: Orthopedic Innovation’s Past and Future
Florence Joffroy-Black, CM&AA, is a longtime marketing and M&A expert with significant experience in the medical technology industry, including working for multi-national corporations based in the United States, Germany, and Israel. She currently is CEO at MedWorld Advisors and can be reached at florencejblack@medworldadvisors.com.
Dave Sheppard, CM&AA, is a former medical technology Fortune 500 executive and is now focused on M&A as a managing director at MedWorld Advisors. He can be reached at
davesheppard@medworldadvisors.com.
