Integra LifeSciences – Limit Uncertainty
Integra LifeSciences (IART) is a multinational corporation providing medical devices supporting wide array of surgical needs. Their strategic intent is to become the worldwide leader in in orthopedic extremity surgery, neurosurgery, spine surgery, and reconstructive and general surgery. Their innovative offerings and growth through acquisition has allowed them to become a billion dollar enterprise since their inception in 1989 (“IART profile”). They are headquartered in Plainsboro, New Jersey and have 3,300 employees worldwide (“Company profile,” 2014). Integra's common stock is listed on The NASDAQ Stock Market under the symbol "IART." Integra’s target markets reside in the United States, European Union, Asia Pacific, BRIC (Brazil, Russia, India and China) and Latin America.
Integra's business model is matrix broken down into divisions supporting extremities, spine, neurosurgery, and international. This allows them to focus on core competencies while responding to local needs. Their broad portfolio of products include orthopedics, implants and hospital equipment used in neurosurgery, neuromonitoring, neurotrauma, and related critical care. Integra’s primary markets are within the U.S., where approximately 75% of revenue is generated (“Integra lifesciences reports,” 2014).
Integra’s growth from 1989 through 2014 has been driven using an acquisition model. During this time, Integra has completed over 40 acquisitions. This model has limited organic growth as most of their new product introductions surround derivative improvements of existing products. Their most recent acquisition was their largest. They consummated a deal with Covidien to acquire DuraSeal for $235 million in cash with an additional $30 million in performance incentives (“Integra lifesciences completes”). DuraSeal is a sealant used to prevent leakage of cerebrospinal fluid (CSF) after head and spine surgery (“FDA approved medical,’ 2009)
This analysis will assess how changes in economies and macroeconomic policy can affect Integra financial performance as a multinational corporation. It will address considerations surrounding the main economic agents of household, business, government and foreigners. The analysis will conclude with scenario analysis conceptualizing how Integra can mitigate risk with economic changes and currency adjustments in order meet or exceed revenue and growth projections.
Integra’s 2014 first quarter performance exceeded market expectations and compared favorably to 2013 outcomes. Table 1 outlines performance by division, U.S. versus international and identifies the impact of currency exchange rates (“Integra lifesciences reports,” 2014).
Table 1 Three Months Ended March 31,
2014 2013 Change
U.S. Neurosurgery $54,383 $38,996 39%
U.S. Instruments 36,720 36,948 -1%
U.S. Extremities 31,912 31,361 2%
U.S. Spine & Other 41,067 43,548 -6%
International* 50,977 45,799 11%