Smith & Nephew to spin-out biologics and clinical therapies unit

Texas, USA-based venture capital firm Essex Woodlands has entered into a strategic partnership with the UK’s medical devices giant Smith & Nephew (LSE: SN) to fund the spinout of the latter's Biologics and Clinical Therapies division and develop a leading global orthopedic biologics company, Bioventus. The transaction is expected to be completed in the next several months.

Under the terms of the accord, S&N will receive a one-off cash payment of $98 million Essex Woodlands and a $160 million five-year note from Bioventus. Essex Woodlands will invest a minimum of $60 million as part of $118 million of equity in return for a controlling 51% interest in Bioventus, with S&N retaining 49%. Pantheon Ventures, a Limited Partner of Essex Woodlands, and Spindletop Healthcare Capital may participate alongside Essex Woodlands in the investment.

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