Sometimes simplifying a business makes things a little more complicated in the short term. When Wright Medical (WMGI) elected to sell its hip and knee implant business to MicroPort for $290 million, the company put itself on path toward becoming a pure extremity and biologics med-tech company, a decision that improve growth and margins down the road. At the same time, though, the transaction removes a cash cow business and forces the company to rebuild its international infrastructure.
On balance, I believe the MicroPort transaction will lead to better shareholder value over the long term as it frees management to maximize the far more promising extremity and biologics opportunities. Likewise, it gives the company more flexibility in...
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