Medtronic Plc, the largest maker of equipment to treat spinal conditions, agreed to help promote Mazor Robotics Ltd.’s guidance system used during spinal surgeries and will take an equity stake of up to 15 percent in the company. Mazor’s stock surged.
Medtronic will purchase newly issued securities representing 4 percent of the company’s outstanding shares for about $12 million, equal to the 20-day trailing average price per share, Mazor said in a statement. It will have the opportunity to buy an additional 6 percent of the Caesarea, Israel-based company, plus a further 5 percent, in future allotments that Medtronic can cap at $20 million apiece.
The two companies will work together to promote Mazor’s next-generation robotic spinal system, used to help surgeons plan and precisely execute surgeries, and develop additional products used during the procedures. Medtronic will buy 15 of Mazor’s new systems by the end of the year. If the initial phase of the agreement meets expectations by the end of 2017, Medtronic will take over exclusive sales and distribution for Mazor’s spinal products. Financial details of the agreement weren’t disclosed.