Clal Finance analyst Yoav Keidar predicts that Mazor Robotics Ltd. (Nasdaq: MZOR; TASE:MZOR) will be acquired within two years for $350 million, double its market cap of $178 million, following the pick-up in sales of its Renaissance robotic navigation system for spinal surgery. "We believe that continued sales growth could attract a buyer for the company. For the first time, we include a merger and acquisition premium in our valuation for the company," he says.
Keidar gives Mazor a "Buy" recommendation with a target price of NIS 25 per share, a 17% premium over today's opening price on the TASE of NIS 20.20.
"The $20 million sales forecast for the Renaissance system and disposable part is projected to rise to $30 million in 2014 and $40 million in 2015. The positive penetration curve for the system could be steeper in 2015, which means that $40 million is an arbitrary figure in the current models," says Keidar.
"Mazor is at an interesting point. Its ability to break in to the US market in the next two years could create a potential acquisition opportunity. We derive the target price from a 75% sales multiple on the industry's sales of $7-30 million in 2013 (for growing mid-cap medical devices companies), and 25% of the estimated $350 million acquisition price of the company. This is the valuation Covidien plc (NYSE: COV) paid for Israeli lung navigation company SuperDimension."
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2013
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