Dive Brief:
- Globus Medical said Monday it promoted Keith Pfeil to CEO to fill a vacancy created by the resignation of Daniel Scavilla.
- Scavilla has left Globus to take up the CEO position at dental products company Dentsply Sirona. Globus, which sells musculoskeletal devices, named its chief operating and financial officer Pfeil as Scavilla’s replacement.
- RBC Capital Markets analysts said in a note to investors that they believe Scavilla left on good terms to take up a post “that likely represented a better financial opportunity.” The analysts said they “are highly confident in the leadership transition” given Pfeil’s experience.
Dive Insight:
Scavilla joined Globus as CFO in 2015. The company named the executive as CEO when Dave Demski resigned in 2022. Scavilla’s departure echoes his appointment as CEO. In both cases, Globus immediately promoted from within to fill the vacancy created by the resignation of its top executive.
Pfeil joined Globus in 2019, taking on the CFO role when Scavilla became leader of the company’s global orthopedic, trauma and joint reconstruction units. Globus added chief operating officer to Pfeil’s title in 2024. With Pfeil now rising to CEO, the company has promoted Kyle Kline from senior vice president of finance to CFO.
Globus shares closed down 7.9% at $51.89 Monday, despite reporting preliminary second-quarter sales that beat the consensus estimate of analysts. RBC analysts said the stock reaction was overdone, reflecting their confidence in Globus’ internal succession plan and track record of promoting internally.
“Keith has been increasingly taking on leadership roles internally during his six-year tenure at [Globus] and has demonstrated his strategic mindset and results-oriented leadership. We believe Dan would have opted for a transition plan if an internal succession plan was not in place,” the analysts said. “Kyle Kline is also part of the internal succession plan and has been with the company for eight years.”
Truist Securities analysts said in a note that “a surprise CEO change can always drive incremental uncertainty, and the announcement comes within months of reporting disappointing [first-quarter] results.” However, the preliminary results do not suggest a major change in business trends from the first quarter, the analysts said, and Dentsply’s appointment of Scavilla “renders the transition (and timing) less ‘suspect’.”
Globus expects sales of approximately $745.3 million in the second quarter. RBC analysts said the figure beat the consensus on Wall Street by around $5 million, supported by performance at Nevro. Globus struck a deal to buy Nevro, a spinal cord stimulation business, for $250 million in February.
Scavilla’s time as Globus CEO also included the $3.1 billion acquisition of spine company Nuvasive.
