Espicom View: According to Espicom 's Medical Device Market Report, Turkey represents a steadily growing orthopaedics market and is ranked amongst the top 20 largest in the world in value terms. The country has, in recent years, focused on developing its healthcare system, with the goal of providing universal healthcare, but this has yet to be realised. By strengthening its presence in the market through the acquisition of Plato Grup, Smith & Nephew is poised to take advantage of the country's steady long-term growth and healthcare reforms.
On 5th July, Smith & Nephew entered into an agreement to acquire certain assets related to the distribution of its orthopaedic reconstruction, trauma and sports medicine products in Turkey, currently conducted through Plato Grup.
With this acquisition, S&N will be building upon a proven commercial platform, good reputation and strong relationships in the Turkish market. It is anticipated that all Plato employees will join S&N, including management and the sales team. Plato has worked for S&N since the former was founded in 1995, and the acquisition, which is being made through the local subsidiary of S&N, is expected to close in the second half of 2013, subject to the satisfaction of certain customary conditions. Terms have not been disclosed.
The acquisition is in line with the company's strategic priority to expand in emerging markets. As well as reinforcing its position in established markets (US, Europe, Australia, New Zealand, Canada and Japan), S&N believes there are opportunities to build upon existing strong positions, win market share through greater innovation and drive efficiencies to liberate resources. Through these actions, it will meet the challenges of subdued markets, maintain revenue growth and maximise margins.
The company will build upon its initial success in China and expand to create sustainable businesses in India, Brazil and Russia, as well as in Turkey. These emerging markets are enjoying good GDP growth and have an expanding surgical infrastructure, the two key features required to make a new market attractive to S&N. The Turkish orthopaedics and prosthetics market is forecast by Espicom to grow at a CAGR of 9.6 per cent between 2012 and 2017. In particular, the company sees significant opportunities to build value through augmenting its existing portfolio with new products specifically designed for, and manufactured, in these markets.