Globus Medical, Inc. (NYSE:GMED) Q4 2022 Earnings Call Transcript

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Dan Scavilla: Thanks, Matt. So we won’t go into too much detail. We’re going to put together filings and different things in our proxy where you would certainly have access to that in the near future. What we’re signaling, of course, is that like in any deal, we would expect to have some reasonable amount of dissynergies. And I think that anybody would want that in there as a prudent statement. So we’ve built that in that way, whether that be reps going to a competitor, account switching to just natural things that would occur. What Keith said and what I would stand by is, however, when we’re able to get our hands on a cervical disc that’s multilevel that they have, their lateral procedures, we can hand to them are expandables.

We can open up a market for our enabling technology. All of those things will have actually offsets that we believe would occur over a couple of years. And I think we all strongly believe in this. So by combining the portfolios, combining the markets will come out stronger. And we’ll see some short-term pain, but both pains are doing this for the long-term, not the current 12 months, but we’re really looking to say, for multiyear, we’re building a strong company.

Matt Taylor: Maybe I could just ask 1 follow-up on the synergies. You seem very confident in that target that you laid out. Maybe just talk about how much of that stuff is you’d call it well identified or lower hanging fruit? And how much of it is harder to kind of pull apart and synergize in your plan?

Keith Pfeil: Thanks for the question. Yes, we do feel good about achieving the $170 million in synergies. I would say that we’re in the early stages of working with the teams to better understand the business. But as we look at our cost structure, versus their cost structure, we feel confident that we’re able to achieve these savings when you look at the combined spending of both companies together.

Matt Taylor: Great. Thank you, guys.

Keith Pfeil: Thank you.

Operator: Thank you. Our next question comes from the line of Matt Miksic of Barclays. Your line is open, Matt.

Matt Miksic: Hui, it’s Matt Miksic. I wasn’t quite referring to me after I look less name, but if you can hear me — can you hear me okay?

Keith Pfeil: Yes, we got you, Matt.

Matt Miksic: Yes, a lot of Matt on these calls. So one just follow-up, if I could, on the synergies on Matt Taylor’s comment, and then I have one on margins, if I could, so on the synergies — can you talk about maybe what is not included in those? I mean there’s a fair amount of complemenary products, robots and cervical disc replacement and the cervical portfolio at GMED that are potentially complementary in the sense of driving additional sales. Are those included if they are, I guess, what things have you and have you not included in that number? And then I have one follow-up.

Dan Scavilla: Yes. Matt, so for clarity, I believe you’re talking about sales synergies and dis-synergies. Is that right?

Matt Miksic: Yes. Correct.

Dan Scavilla: Okay. So separate from the overall cost savings with that. Again, we’re not going to go into a lot of granular detail. I think what we’re just saying is take a look at what NuVasive has is a strength where we can benefit, and we’re saying, look, it’s an opposite way for us, too. It’s really that combination. We have some placeholders and some ideas that we’re working through, but this is early stages, right? We really just announced a few days ago. And we’ve gone from being blind into ability to look at this with a little bit more clarity. We’ll focus through it. I think what we’re signaling is confidence that we have enough tools in our offering to offset sales dis-synergies? And then just kind of back to the question Matt had asked on actually costs synergies.

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