Dive Brief:
- Enovis said Tuesday it will buy eCential Robotics for 155 million euros (nearly $180 million) upfront to support development of surgical robots for orthopedic procedures.
- Working with the team at France-based eCential, which developed Johnson & Johnson’s Velys Spine surgical robot, Enovis aims to start launching products in late 2028.
- The takeover closes Enovis’ “most notable competitive gap,” formalizing an existing collaboration with eCential and making robotics central to its future, BTIG analysts said in a note to investors.
Dive Insight:
Enovis has two segments, one that makes medical devices for the surgical repair of bones and joints and another that offers products for rehabilitation, pain management and physical therapy. With orthopedic rivals such as J&J and Stryker launching surgical robots, Enovis CEO Damien McDonald told investors on an earnings call last month that “enabling tech will be foundational to our long-term growth strategy.”
Buying eCential will position Enovis to add robotics capabilities to its Astra enabling technology system, which currently includes an augmented reality headset and procedure planning software. Enovis aims to launch a knee robot in late 2028 and introduce a shoulder robot in 2029. Because eCential produced systems including J&J’s Velys, BTIG said they believe “market acceptance is de-risked.”
The planned knee device has “subtle nuances with features” that will differentiate it from rival robots, Louie Vogt, group president of the reconstructive business group at Enovis, said on a call with investors to discuss the deal. Vogt and his colleagues see bigger differences in the shoulder sector, which is served by Smith & Nephew’s Cori, Stryker’s Mako and Zimmer Biomet’s Rosa.
“Currently, the form factor and robotic offering in shoulder is suboptimal,” McDonald said on the call. “We believe developing a robot with eCential Robotics that carries advantages such as a robotic arm with seven degrees of freedom will differentiate our offering in the market.”
Enovis already collaborates with eCential. Asked by an analyst about the rationale for buying its partner, McDonald said: “The single most important thing for us was about agility and being able to respond to the way clinicians want to engage in terms of developing the next generation of technology.” Bringing robotic capabilities in-house will enhance the speed and agility of development, McDonald said.
The acquired company employs about 50 people in France, with staff working on engineering, software and hardware development supported by small quality, regulatory and manufacturing teams, Vogt said, adding that the manufacturing and assembly team can produce 75 to 100 robots a year.
In addition to the upfront fee, Enovis has committed up to 35 million euros in milestones to buy eCential. The contingent payments are tied to development milestones for the knee and shoulder devices, Enovis CFO Ben Berry said on the call.
Enovis forecasts that the deal will suppress margins in 2027. BTIG analysts said they are “not thrilled about” the hit to margins, although they acknowledged that Enovis’ current valuation is not giving the company “much credit for the progress it was already making.”
Enovis’ shares closed down 16.5% at $20.53 on Tuesday.
