Exhibit 99.2
Acquisition of
ORATEC Interventions, Inc.
Smith+Nephew
Slide 1 of 12
ORATEC Acquisition
Announcing a $310m tender offer of $12.50 a share
Major advantages for Smith & Nephew Endoscopy -
A leadership position in RF in arthroscopy
New position in emerging minimally-invasive spine market
Potential for other endoscopic procedures
Substantial distribution leverage opportunities
Significant integration benefits
Earnings enhancing (pre goodwill) in first full year
Smith+Nephew
Slide 2 of 12
Smith & Nephew Endoscopy
Value Drivers
Access
Visualization
Resection
Repair
Focus on Technique not Product
Arthroscopy - Market Leader
Digital OR Innovator
Vascular - minimally invasive
phlebectomy - TriVex
Specialty Abdominal - HandPort(TM)
2001 sales growth - 14%
[Pie Chart]
Global Endoscopy Market
$5 billion
S&N 7%
BSCI 9%
Storz 6%
Olympus 11%
Stryker 4%
Medtronic 4%
Linvatec 4%
J&J 15%
Bard 4%
Tyco 6%
Guidant 3%
Other 27%
Smith & Nephew 30%
Linvatec 14%
Arthrex 13%
Stryker 8%
Mitek 11%
Arthrocare 7%
ORATEC 3%
Others 14%
Smith+Nephew
Slide 3 of 12
ORATEC
RF focus arthroscopic and
spine segments
Sales of $48 million in 2001
Products leverage unique
advantage in temperature
control and feedback
Strong IP
Innovator in tissue shrinkage
applications
[Pie Chart]
2001 Global Arthroscopy RF Market
$122M
Mitek 25% $30M
ORATEC 22% $27M
Arthrocare 52% $63M
Other 2% $2M
Smith+Nephew
Slide 4 of 12
Minimally Invasive Spine
One of the fastest growing
specialties in the spine market
SpineCATH(TM) IntraDiscal
ElectroThermal Therapy (IDET(TM))
Controlled heat to modify tissue in
the disc wall
Direct spine sales force
Clinical studies to drive
reimbursement
[Pie Chart]
ORA-50 S ElectroThermal Spine Generator
ORAflex(TM) probe
with deflectable tip
SpineCATH(R) Catheter
Smith+Nephew
Slide 5 of 12
Acquisition Synergies
Technology
Sales
Operations
New Techniques
One of the broadest RF technology
portfolios in the world
Global endoscopy market
coverage and capabilities
Industry leading cost, quality and
service
Expanded offering in rapidly
growing procedure segments
Smith+Nephew
Slide 6 of 12
Technology Synergy
Only company to offer RF cutting, ablation, shrinkage
and mechanical resection combined in a bipolar format
Only company providing temperature control
with feedback
Broad generator knowledge base
#1 position in minimally invasive spine procedures
Complete line of arthroscopic tips
Able to transfer Catheter capability to new
techniques / specialties
Opportunity to be 1st to market with RF Central &
Voice Control
Smith+Nephew
Slide 7 or 12
Sales Synergy
Most comprehensive RF technology supplier in the World
World's largest arthroscopy sales organization
Experienced direct US sales organization for spine
Emerging leader in surgeon training with over 4000
surgeons trained on new techniques in 2001
Leader in endoscopic equipment financing programs
- eFast(TM)
Comprehensive sales training capability including web
based training
Smith+Nephew
Slide 8 of 12
Consolidation Synergy
World's best RF / Electromechanical Endoscopic
R&D team
Significant economies of scale with sales and
marketing expenditures
World class capital equipment assembly, quality &
cost control
Superior quality & cost management
#1 global service capability in RF
Inventory management
Comprehensive post acquisition plan
Smith+Nephew
Slide 9 of 12
ORATEC
Cost of Acquisition $m
Tender offer 291
Options/warrants 19
Cash and investments assumed (52)
----
258
Transaction costs 11
Integration costs 12
----
281
====
Smith+Nephew
Slide 10 of 12
ORATEC
As if acquired for full year
$m
Sales 48
EBIT reported (2)
Integration benefits 11
----
9
Interest on $281m (11)
----
(2)
Tax 1
----
Earnings effect (1)
----
EPS effect -1/2%
Before:
Amortization (for 20 years) (12)
Tax losses (cash benefit for 4 years) 5
Sales growth 2002 +10%
2003 +25%
Smith+Nephew
Slide 11 of 12
PPT Slide
Smith+Nephew
First Choice in Medical Devices
Slide 12 of 12