Stryker Corporation Spending $375 Million to Acquire Assets of Small Bone Innovations
Today, medical technology company Stryker announced it would be acquiring substantially all the assets of Small Bone Innovations (SBi), whose products are used in small-joint procedures, for $375 million in cash. The company said that as a result of tax benefits from the purchase, the net cost to Stryker will be $285 million.
Currently headquartered in Morrisville, Pa., SBi was founded 10 years ago and designs products which are used in small bones and joints to address and treat trauma and diseases. In addition to its headquarters in Morrisville, it also has facilities in France and Germany. Last year, SBi had approximately $48 million in sales of its products which Stryker is acquiring.
"The addition of the [Scandinavian Total Ankle Replacement System, aka STAR Ankle] strengthens our product offering in this fast growing business, and demonstrates our continued commitment to growth in this segment and more broadly in extremities," noted the president of orthopaedics at Stryker, David Floyd, in the announcement. "We are dedicated to providing our Foot & Ankle customers and their patients with a complete set of solutions for their clinical needs." The press release noted that the cementless three-piece ankle replacement product is available in over 40 countries.
In addition to the STAR Ankle, Stryker is buying from SBi a variety of replacement products that are used in fingers, wrists, and elbows. As a result of the acquisition Stryker highlighted this would allow its Foot & Ankle product portfolio to address the broad range of procedures across small bone extremities.
Provided the acquisition meets regulatory approval and closing conditions, it is expected the purchase will close in the third quarter of this year. Stryker did note as a result of the purchase, its earnings per share will be reduced by $0.02 in 2014. Yet this would be an impact of less than 1% on its previously announced guidance of $4.75 to $4.90 per share.
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