Will Karl Storz, the “King of Hard Mirrors”, acquire a surgical robot company?

Recently, Karl Storz, a long-established giant in the field of traditional endoscope equipment, announced its intention to acquire the American surgical robot company Asensus Surgical at a high premium of 35 cents per share.

Asensus also announced that it has signed a non-binding letter of intent with Storz, which enables Karl Storz to conduct due diligence and negotiations with Asensus. In addition, Asensus said that before signing the letter of intent, it had extensively considered alternatives including potential cooperation and licensing transactions, a "solo" strategy that relies on a large amount of financing, a sale of the company or additional development transactions.

New blue ocean strategy of traditional giants

As a medical device manufacturer with nearly 80 years of history , KARL STORZ once occupied half of the market in the field of traditional endoscopes. However, with the development of the times and the advancement of technology, surgical robots have emerged. Faced with the impact of this emerging field, KARL STORZ chose to directly acquire it.

For Karl Storz, the acquisition of Asensus is undoubtedly a shortcut to enter the field of surgical robots. Asensus's independently developed Senhance surgical robot system and next-generation LUNA robot platform integrate real-time surgical image analysis, artificial intelligence assistance and other functions.

The LUNA robotic platform is not just a mechanical surgical robot, but an "intelligent surgical unit" that integrates artificial intelligence technology. The system can not only analyze surgical images in real time, but also use machine learning algorithms to provide clinical insights, thereby helping to reduce surgical variability and improve surgical quality and safety. Asensus said last year that the company may obtain approval for LUNA from the U.S. Food and Drug Administration (FDA) in 2025.

If the LUNA platform is eventually approved by the FDA and successfully commercialized, it will revolutionize surgical robots. In the future, doctors will not only be able to use robots to perform precise operations, but also receive real-time analysis and suggestions from artificial intelligence systems, thereby better controlling the surgical process and reducing risks. It is foreseeable that this "human-machine collaboration" model will greatly improve the accuracy and consistency of surgery and bring better treatment experience to patients.

From a strategic perspective, the acquisition by KARL STORZ will, on the one hand, enable Asensus to quickly enter the surgical robot market by leveraging its technology and product lines; on the other hand, as an established giant in the industry, KARL STORZ will also provide Asensus with strong financial, channel and brand support to help its products reach the market faster.

More details about the letter of intent

The letter of intent provides that Asensus will not engage in negotiations for an alternative transaction during a 10-week exclusivity period. During this period, Karl Storz intends to conduct due diligence while the two companies pursue merger talks. Both companies have the right to terminate their pursuit of the proposed transaction.

In connection with the letter of intent, Asensus entered into a fully secured promissory note or bridge loan with Karl Storz. This enables the company to obtain up to $20 million in loans from Karl Storz to support operations during the exclusivity period and beyond.

The two companies said they plan to negotiate and finalize a merger agreement during the exclusivity period. If a deal is reached, Asensus said it would plan to quickly obtain shareholder approval.

Asensus said it could not guarantee a final agreement with Karl Storz.

Therefore, it is still uncertain whether Karl Storz can successfully acquire Asensus, and we will continue to pay attention to the progress of the acquisition.