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Based in Audubon, PA, Globus Medical (NYSE:GMED) scheduled a $200 million IPO with a market capitalization of $1.55 billion at a price range mid-point of $17, for Thursday, April 2, 2012. Three other IPOs are scheduled for the week of July 30. Full IPO calendar available here.

GMED filed an updated [S-1] July 23, 2012.

UNDERWRITERS
Manager; Joint Managers: BofA Merrill Lynch; Goldman Sachs; Piper Jaffray; Leerink Swann.
Co-Managers: Canaccord Genuity; William Blair/ Oppenheimer.

SUMMARY
GMED is a medical device company focused exclusively on the design, development and commercialization of products that promote healing in patients with spine disorders.

Strong financial performance
Founded in 2003, GMED revenue for the March 2012 quarter was $95 million, up 22% from the year earlier quarter. Net income increased 23% to $18 million from $14 million

EBITDA was 36% for both quarters, and GMED generated $23 million in cash from operations for both quarters.

Understandable growth plan
GMED believes it can continue to growth in the U.S. by adding more salespeople. Only 6% of 2011 revenue came from international sales, so GMED has barely scratched the surface internationally.

Strong product pipeline
GMED expects to launch five to ten new products in each of the next three years.

Robust intellectual property
As of April 30, 2012, GMED owned 98 issued U.S. patents and had applications pending for 247 U.S. patents.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

annualizing March 2012 qtr

Cap (MM)

Sales

Earnings

BookValue

TangibleBV

Profit %

Globus Medical

$1,550

4.08

22

4.6

4.9

19%

Medtronic (NYSE:MDT)

$39,000

2.27

10

2.3

8.9

23%

Stryker (NYSE:SYK)

$19,760

2.35

15

2.5

4.3

15%

Johnson & Johnson (NYSE:JNJ)

$189,000

2.87

34

3.1

7.0

8.5%

JNJ, trailing 12 mos earnings

22

NuVasive (NASDAQ:NUVA)

$964

1.59

360

1.9

4.0

0.4%

SEGMENT COMPARISON

Segment competitors

Stock Price % Change YTD

Medtronic

7%

Stryker

-14%

Johnson & Johnson

7%

CONCLUSION
GMED is probably a longer term buy, considering that segment competitors have not performed well this year, and may not have much of an IPO pop. Seventy-five percent of the IPO is coming from selling shareholders.

BUSINESS
GMED is a medical device company focused exclusively on the design, development and commercialization of products that promote healing in patients with spine disorders.

PRODUCTS
GMED sells implants and related disposables to customers, primarily hospitals, for use by surgeons to treat spine disorders. All of its products fall into one of two categories: innovative fusion or disruptive technologies.

MARKET
According to iData Research, Inc. the $10.0 billion worldwide spine market consists of the $5.9 billion spinal fusion market and the $4.1 billion disruptive technologies market. GMED believes the worldwide market for spine surgery will continue to grow. Read more, S-1 pages 2 & 3

PRODUCT PIPELINE
GMED is currently conducting clinical trials for several new disruptive technologies under FDA-approved investigational device exemptions, or IDEs, including the SECURE-C Cervical Artificial Disc, the ACADIA Facet Replacement System, and the TRIUMPH Lumbar Disc.

COMPETITION
GMED believes its significant competitors are Medtronic, DePuy (a division of Johnson & Johnson), Synthes (which is being acquired by Johnson & Johnson), Stryker and NuVasive, which together represent a significant portion of the spine market.

GMED also competes with smaller spine participants such as Alphatec Spine, Orthofix International, and Zimmer.

SHAREHOLDERS PRE-IPO
Non-executives & directors
Clarus Lifesciences I, 9.1%
Goldman Sachs, 8,7%

EMPLOYEES
As of March 31, 2012, GMED had 724 employees, 158 of whom were engaged in product development, 113 in general administrative and accounting activities and 277 in sales and marketing activities.

USE OF PROCEEDS
Expects to net $35 million from the sale of 2.9 million shares. Shareholders intend to sell 8.8 million shares, or 75% of the offering.

Disclaimer: This GMED IPO report is based on a reading and analysis of [ticker]'s S-1 filing which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Globus Medical