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Here's Why Mazor Robotics Is Soaring Today

What happened

Shares of Mazor Robotics (NASDAQ: MZOR), a robotic surgery company focused on procedures of the spine and brain, jumped 10% as of 10:41 a.m. EDT on Friday. The double-digit move is a response to the news that Medtronic (NYSE: MDT) is acquiring the company.

So what

Here are the details of the proposed transaction:

  • Medtronic is acquiring Mazor for $58.50 per share, or about $1.64 billion.
  • Since Medtronic already owns a substantial amount of Mazor's stock, the net purchase price will be $1.34 billion.
  • The deal will be made in cash.
  • The boards of both companies have already unanimously approved the transaction.
  • The deal is expected to close in Medtronic's fiscal third quarter, which ends on January 25, 2019.
  • The deal is expected to be "modestly dilutive" to Medtronic's adjusted earnings in fiscal 2019.

Geoff Martha, an executive at Medtronic, praised the deal:

Mazor's CEO Ori Hadomi was also enthusiastic about the combined companies' potential:

Now what

Medtronic controls a substantial amount of Mazor's stock and certainly has the financial firepower to complete this deal. Since both companies boards have already given this transaction the unanimous thumbs-up, it looks like a done deal.

Personally, this shareholder thinks that the acquisition makes a lot of sense, but I'm disappointed that I will no longer be able to participate in Mazor's upside over the long term. Given that this looks like a fait accompli, my plan is to sell my shares as soon as the Fool's trading guidelines allow and roll the proceeds into another highly promising healthcare business.

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Brian Feroldi owns shares of Mazor Robotics. The Motley Fool owns shares of Medtronic. The Motley Fool recommends Mazor Robotics. The Motley Fool has a disclosure policy.