- change ups
Stryker offers $764M to acquire Trauson Holdings and expand in China
Stryker (NYSE: SYK) announced Thursday it is offering to buy out Trauson Holdings Co. of China in an attempt to expand its presence there, one of the world’s most rapidly growing markets for orthopedic medical devices.
The Kalamazoo-based company is offering HK $7.50, equal to 97 cents, for each share of Trauson. That is reportedly a premium of about 44 cents on the Chinese firm’s closing share price on Jan. 8. The total all-cash offer is $764 million.
“The acquisition of Trauson is a critical step toward broadening our presence in China,” said Kevin A. Lobo, president/CEO of Stryker.
Lobo added that Trauson is a well-established brand and “a leading player in the Chinese trauma and spine market,” which “underscores our commitment to strengthening our presence globally."
"With its research and development expertise, manufacturing capabilities and strength of its distribution network, Trauson is a compelling opportunity for Stryker to drive growth in China and other emerging markets for years to come,” Lobo said.
Founded in China in 1986, Trauson had sales in 2011 of about $60 million.
Trauson is “the leading trauma manufacturer in China and a major competitor in the spine segment,” according to Stryker.
Stryker and Trauson have had an OEM manufacturing agreement for instrumentation sets since 2007.
Last week, Stryker reported preliminary sales of $8.7 billion in 2012, an effective net sales increase of 4.2 percent for the year ended Dec. 31.
The company is projecting 2012 adjusted diluted net earnings per share to be in the range of $4.05 to $4.07, an increase of 8.9 to 9.4 percent over 2011. The company also recently announced a 25-percent increase in its quarterly dividend and an increase in its share re-purchase authorization to $1 billion.
The Trauson deal is expected to be neutral to Stryker’s anticipated earnings this year, according to Stryker.