Smith & Nephew To Acquire Atracsys For Surgical Optical Tech

About: Smith & Nephew plc (SNN)
by: Donovan Jones

Smith & Nephew has agreed to acquire Atracsys Sarl for an undisclosed sum.

Atracsys has developed a family of optical positioning technologies for surgical and industrial applications.

SNN is gaining a high-quality, low latency system to integrate into its next-generation computer assisted and robotics ecosystem.

Quick Take

Smith & Nephew (SNN) has agreed to acquire Atracsys Sarl for an undisclosed amount.

Atracsys has developed purpose-built optical tracking camera systems for digital surgery applications.

With the deal for Atracsys, SNN is gaining a high quality, low latency optical imaging system as part of its next-generation robotics and computer-assisted surgery ecosystem launch in 2020.

Target Company

Switzerland-based Atracsys was founded in 2004 to develop advanced optical tracking systems for medical surgery applications such as implant placement and robotics-assisted surgery with down to sub-millimeter precision.

The firm’s products have also been used by industrial robotics systems such as those of Kiva.

Management is headed by co-founder and Chief Executive Officer Gaetan Marti and co-founder and Chief Technology Officer Maurice Halg.

Atracsys’ primary offerings include:

  • Sprytrack 180 - compact, mobile optical tracking system
  • Fusiontrack 250 - passive & active real-time optical pose-tracking
  • Fusiontrack 500 - tracking of reflective sphere, disks and IR-LEDs in real-time
  • Passive Accessories
  • Active Accessories

Market & Competition

According to a market research report by BIS Research, the global surgical robotics market is expected to reach $12.6 billion by 2025.

This represents a CAGR (Compound Annual Growth Rate) of 12.03% from 2018 to 2025.

The main drivers for this expected growth are an increasing aging population creating more demand for services, growing desire for minimally invasive surgeries, and increased funding for next-generation robotic systems that can provide services to more patients.

Major competitive vendors that provide or are developing robotic surgical systems include:

  • Intuitive Surgical (ISRG)
  • Accuray (ARAY)
  • Mazor Robotics (MZOR)
  • Medrobotics
  • Medtech
  • Renishaw (OTCPK:RNSHF)
  • Stryker (SYK)
  • Synaptive Medica
  • Titan Medical (TMDI)
  • Think Surgical
  • TransEnterix (TRXC)

Source: Sentieo

Acquisition Terms & Financials

Smith & Nephew didn’t disclose the acquisition price or terms and didn’t provide a change in financial guidance.

A review of the firm’s 2018 annual report indicates that as of December 31, 2018, SNN had $365 million of cash and $3.2 billion in total liabilities, of which long-term debt was $1.3 billion.

Free cash flow for the twelve months ended December 31, 2019, was $584 million.

In the past 12 months, SNN’s stock price has risen 18% vs. Stryker’s rise of 15.25%, as the chart below indicates:

Source: Sentieo


SNN is acquiring Atracsys as part of a push into computer-assisted surgery in conjunction with robotic technologies.

As Skip Kiil, President of Orthopaedics at Smith & Nephew, stated in the deal announcement:

"The promise of computer assisted surgery with robotics is to provide faster, more accurate, reproducible results that enable surgeons to restore quality of life to more patients. With the acquisition of Atracsys, we are securing what we believe to be the best-in-class position tracking technology for our next-generation robotic-assisted surgical system."

The Atracsys optical tracking system has applications across several surgical sub-domains, including orthopedics, spine, dental, and neurosurgery.

SNN particularly highlighted Atracsys’ FusionTrack 500 camera model, which it plans to integrate into its next-generation digital surgery and robotics ecosystem, which it plans to launch in 2020.

The digital surgical and related robotics markets are large and growing at a strong rate, so the acquisition will bolster SNN’s system offerings to surgeons in numerous specialties at a significant inflection point in the adoption of computer-assisted surgical operations.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.