Acquisition

Smith & Nephew Plc
14 February 2002

14 February 2002



               SMITH & NEPHEW REACHES AGREEMENT TO ACQUIRE ORATEC

    Company Provides New Technology Platform for the Endoscopic Marketplace


-        Smith & Nephew to commence offer for ORATEC at $12.50 per share.

-        Establishes Smith & Nephew as a leader in radio frequency technology
         for minimally invasive surgery.

-        Substantial leverage through Smith & Nephew's global sales and
         marketing capability.

-        Significant integration savings.

-        Earnings enhancing (pre goodwill) in first full year following
         acquisition.

Smith & Nephew plc (London Stock Exchange: SN. NYSE: SNN), the global advanced
medical devices group, and ORATEC Interventions, Inc (NASDAQ: OTEC), a medical
device innovator in the use of thermal energy to treat joint and spine
disorders, today announce they have reached a definitive agreement for Smith &
Nephew to acquire ORATEC.  On completion of the acquisition, ORATEC will become
part of Smith & Nephew's Endoscopy Division, headquartered in Andover, Mass.



Under the terms of the agreement, the Board of Directors of ORATEC has
unanimously approved a cash tender offer by Smith & Nephew to acquire all
outstanding shares of ORATEC at $12.50 per share.  The cost to Smith & Nephew of
acquiring the equity of ORATEC is $310m.  The net cost after deducting ORATEC's
cash and short term investments, which were $52m as of December 31 2001, is
expected to be $258m.  Smith & Nephew intends to fund the acquisition from
available bank facilities.



ORATEC



ORATEC is a leading technology innovator in the development and marketing of
radio frequency (RF) devices that use controlled thermal energy to treat joint
and spine disorders through the cutting, removal and ablation or modification of
damaged or stretched soft tissue.  It has a strong presence in RF-based
arthroscopic procedures and has a market-leading position in the emerging and
fast-growing minimally invasive spinal segment.



ORATEC markets two minimally invasive systems: the VulcanTM ElectroThermal
Arthroscopy System to treat joint disorders; and the SpineCATHTM IntraDiscal
ElectroThermal Therapy (IDETTM) System to treat chronic low back pain associated
with contained herniated discs.



The Vulcan ElectroThermal system had sales of $27m in 2001 and incorporates
proprietary technology for use in arthroscopy.  The system provides a minimally
invasive outpatient treatment option for patients who suffer from joint
disorders caused by loose or stretched ligaments.



The IDET procedure, with sales of $21m in 2001, is performed on an outpatient
basis and uses controlled heat to modify tissue in the disc wall.  Sales of
ORATEC's spine products have slowed as a result of challenges in the payor
reimbursement environment.  It is expected that IDET sales will recover and grow
following the publication of results of two-year follow up clinical studies in
peer-reviewed publications.



ORATEC has a strong intellectual property and technology base and Smith & Nephew
believes that its technology also has potential for wider application in other
endoscopic procedures.  In addition, it has extensive research and development
capabilities in RF, providing it with a substantial flow of new products.



In the year ended December 31, 2001, ORATEC had sales of $48m and pre tax
profits of $0.8m.  Net assets amounted to $73m, of which $52m was cash and
short-term investments.



Benefits of the acquisition



The acquisition will enhance the leading position of Smith & Nephew's Endoscopy
Division in arthroscopy and immediately establish the business as a leader in
the arthroscopic RF market.  By expanding customer access through the global
sales and marketing capabilities of Smith & Nephew's Endoscopy Division, Smith &
Nephew believes that the sales of ORATEC's market-leading products can be
substantially enhanced.



ORATEC also represents an important step in Smith & Nephew's longer-term
objective to build a strong position in the wider endoscopy market, including
the emerging minimally-invasive technologies in the spine market.  ORATEC has an
established and direct spinal sales force, and strong technology to help access
this fast-growing sector of the overall $1.8bn spine market.



Integration benefits of $11m will mean that the acquisition is expected to be
earnings enhancing before goodwill amortization in its first full year.  In
addition, Smith & Nephew's global distribution capabilities are expected to
drive future sales and profits growth from ORATEC's technologies.  Costs of
integration are expected to amount to $12m.  Goodwill amortization is expected
to amount to $12m per annum.



Chris O'Donnell, Chief Executive of Smith & Nephew said: 'The acquisition of
ORATEC brings advanced radio frequency technologies to our endoscopy business
that will help sustain its strong growth momentum.  It builds upon our position
as the market leader in arthroscopy and offers a valuable opportunity to enter
the newly-emerging and fast-growing minimally invasive spine segment.  We see
substantial opportunities to leverage Smith & Nephew's global sales and
marketing infrastructure to advance the sales of ORATEC's products.'



'The acquisition of ORATEC will provide us with a world-class radio frequency
technology capability,' said Ron Sparks, president, Smith & Nephew Endoscopy.  '
It provides us with benefits that will strengthen our position in the endoscopic
marketplace through a broader offering of highly innovative technologies,
techniques and products for a variety of endoscopic specialties.'



'Smith & Nephew is a company that has set a high standard for innovation in the
healthcare industry,' said Kenneth W. Anstey, president and CEO of ORATEC.  '
With this agreement, Smith & Nephew is recognizing the innovation and value that
ORATEC represents to the marketplace and our shareholders.'



Smith & Nephew, through a US subsidiary, will commence a tender offer for all of
ORATEC's common stock no later than February 25, 2002 that is expected to close
in late March or April 2002.  The purchase of shares pursuant to the tender
offer will be followed by a merger in which each share of ORATEC common stock
outstanding not tendered in the offer will be converted into the right to
receive $12.50 in cash.  The tender offer will be subject to customary
conditions, including Smith & Nephew receiving tendered shares that represent at
least a majority of ORATEC's outstanding shares on a fully diluted basis.



Shareholders (including ORATEC directors) owning approximately 13% of ORATEC's
outstanding shares of common stock have entered into agreements to tender their
shares pursuant to this offer.



U.S. Bancorp Piper Jaffray acted as financial advisors to Smith & Nephew, and
JPMorgan acted as financial advisors to ORATEC.



Enquiries


Chris O'Donnell, Chief Executive                       Tel: [phone]
Smith & Nephew plc

Peter Hooley, Finance Director                         Tel: [phone]
Smith & Nephew plc

Nancy V. Westcott, 
Chief Financial Officer & VP Administration                  Tel: [phone]
ORATEC Interventions, Inc

Brian Rafferty                                              Tel: [phone]
Taylor Rafferty Associates

David Yates                                            Tel: [phone]
Financial Dynamics




A Smith & Nephew teleconference will be held on Thursday, February 14 at 9 am
GMT for the benefit of analysts and investors.  They should call 020 7960 2254
for conference call details.



A live webcast of the teleconference can be accessed on www.smith-nephew.com or on
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=21179&script=2400&item_id=600466



It will also be archived for later access via the Smith & Nephew website.





Note to Editors



About ORATEC



ORATEC Interventions Inc., (www.oratec.com), based in Menlo Park, Calif.,
develops and markets innovative medical devices that use controlled thermal
energy to treat spine and joint disorders.  The company currently markets two
minimally invasive systems, the SpineCATH IDET system to treat chronic low back
pain associated with contained herniated discs and the ElectroThermal
Arthroscopy System to treat joint disorders.  Its proprietary systems use heat
to modify, cut or remove damaged or stretched soft tissue.  The company markets
its products to orthopedic surgeons, neurosurgeons and pain management
specialists.  More than 3,000 physicians have performed over 400,000 procedures
using ORATEC's technologies.



About Smith & Nephew  and Smith & Nephew Endoscopy



Smith & Nephew plc, (London Stock Exchange: SN),  (NYSE: SNN), is a global
advanced medical devices company with a highly successful track record in
developing, manufacturing and marketing a wide variety of innovative and
technologically advanced tissue repair products.  These products are primarily
in the areas of bone, joints, skin and other soft tissue.  Smith & Nephew has
extensive marketing and distribution capabilities, with established sales in
more than 90 countries.  For further information, visit Smith & Nephew's website
at www.smith-nephew.com.



Smith & Nephew Endoscopy (www.endoscopy1.com) is one of its major businesses,
and  is a world leader in the development and commercialization of endoscopic
techniques.  Within endoscopy, Smith & Nephew is the recognized world leader in
arthroscopy (endoscopic procedures performed on articulating joints).



This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of ORATEC.  At the time a subsidiary of Smith & Nephew commences
its offer, it will file a Tender Offer Statement with the Securities and
Exchange Commission and ORATEC will file a Solicitation/Recommendation Statement
with respect to the offer.  THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE
SOLICITATION/ RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION WHICH
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
The offer to purchase, the related Letter of Transmittal and certain other offer
documents, as well as the Solicitation/Recommendation Statement will be made
available to all stockholders of ORATEC, at no expense to them.  The Tender
Offer Statement (including the Offer to Purchase, the related Letter of
Transmittal and all other offer documents filed with the Commission) and the
Solicitation/Recommendation Statement will also be available for free at the
Commission's Web site at www.sec.gov.



The statements in this release concerning Smith & Nephew's sales and profit
growth are forward-looking statements that involve certain risks and
uncertainties, including risks associated with new product development and
commercialization, clinical trials, intellectual property, regulatory approvals,
integration risks, competitive offerings, the company's overall business
strategy and other factors.  These forward-looking statements are based on
assumptions that Smith & Nephew believes to be reasonable.  No assurance can be
given that the assumptions will prove to be correct, and the difference between
assumptions and actual results could be material.



The statement in this press release related to ORATEC's future sales are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking
statements.  Potential risks and uncertainties include, but are not limited to,
the need to establish reimbursement from payors, the need for physicians to
support the use of ORATEC's products and the lack of sufficient long term
outcomes data.  Further information regarding these and other risks is included
in ORATEC's SEC filings.



                      This information is provided by RNS
            The company news service from the London Stock Exchange