Globus Medical's shares fell 18 percent following news that it is acquiring NuVasive, valuing the spine devicemaker at $3.1 billion, Seeking Alpha reported Feb. 9.
Analysts with Canaccord and Piper Sandler downgraded Globus Medical, anticipating challenges with the deal, expected to close midyear.
"We see a bunch of challenges to the deal, namely differing cultures, sales force and customer dislocation, and doubling down (essentially) in a slower growth category of orthopedics, which is the spine market," Piper Sandler analyst Matt O'Brien wrote in a stock note.
Analyst Kyle Rose echoed Mr. O'Brien and defended Canaccold's Globus Medical downgrade to "hold."
"This is a true downgrade … almost entirely on the view that shares are unlikely to work in the near term given investor concerns about M&A related disruption," Mr. Rose wrote in a stock note. "This deal brings incremental uncertainty around integration and operational challenges, and we believe shares are appropriately priced and likely to remain range-bound until the dust settles on the M&A."
Amid buzz of Globus Medical's acquisition, spine devicemaker Alphatec saw a stock boost of 8.5 percent, Seeking Alpha reported. The company could capture more shares as Globus Medical and NuVasive merge.