Business
Divestment and share buy-back
Divestment and share buy-back.
About this update from Smith & Nephew Plc
[{"type":"text","content":"\n \nRNS Number : 6219Y Smith & Nephew Plc 18 May 2016 \n\nSmith & Nephew divests Gynaecology business for $350 million and announces associated $300 million share buy-back programme \n \n18 May 2016\n \n \nSmith & Nephew plc (LSE:SN, NYSE:SNN), the global medical technology business, announces that it has signed a definitive agreement to divest its Gynaecology business to Medtronic plc (NYSE:MDT) for $350 million. \nGynaecology has been rapidly built around Smith & Nephew's resection technologies and comprises, primarily, the TRUCLEAR◊ System for the hysteroscopic resection and removal of uterine tissue. Gynaecology delivered revenue of $56 million in 2015, representing a little over 1% of Group revenue.\nGynaecology and its employees will benefit from increased focus and presence in the gynaecology space, including broadening the products and services available to customers. The acquisition strongly complements Medtronic's existing portfolio.\nFinancial impact and use of proceeds\nThe proceeds, which are surplus to Smith & Nephew's current near-term capital requirements, will be returned to shareholders through a $300 million share buy-back programme. This is expected to commence shortly after completion in July 2016. \nThe transaction is expected to be broadly neutral to adjusted earnings ('EPSA') in 2017, after the share buy-back, and to reduce EPSA by less than 1.0¢ in 2016. The gross proceeds are before tax and costs. \nOlivier Bohuon, Chief Executive Officer of Smith & Nephew, said:\n\"Smith & Nephew's management team has a strong track record of creating value through organic growth and by acquisition. The sale of our Gynaecology business demonstrates our disciplined strategic approach to capital deployment and to crystallising value through divestiture at the right time. \n\"The quality of the Gynaecology business was reflected by the strong interest from potential buyers, allowing us to obtain an attractive valuation. Our shareholders will benefit directly from the return of the proceeds through a share buy-back programme, in-line with our capital allocation framework. Gynaecology and its employees will benefit from a new owner with a synergistic platform looking to take the business to the next level.\"\nIt is expected that the majority of Gynaecology employe...