Health Care and Manufacturing

Medical device maker acquires company for up to $375M

June 30, 2014
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Medical device maker acquires company for up to $375M
The STAR Ankle replacement system by Small Bone Innovations. Photo via totalsmallbone.com

A medical device maker has signed a definitive agreement to acquire the assets of a company that makes small bone and joint products for up to $375 million.

Stryker Corporation in Kalamazoo said today that it will acquire the assets of Small Bone Innovations, or SBi, in an all-cash transaction.

SBi is a privately held company based in Morrisville, Penn., with facilities in France and Germany.

The sales of the acquired products were approximately $48 million in 2013.

The transaction is expected to close in the third quarter of 2014.

The net cost to Stryker after taking into account the present value of the tax benefits as a result of the asset purchase structure will be up to $285 million.

Ankle replacement

The assets to be acquired include the Scandinavian Total Ankle Replacement System, or STAR Ankle.

Stryker said the cement-less, three-piece STAR Ankle is the only product of its kind approved under the U.S. Food and Drug Administration's pre-market approval process.

STAR Ankle has been implanted in more than 15,200 patients in more than 40 countries.

Portfolio expansion

The STAR Ankle will join Stryker’s Foot & Ankle product portfolio.

Stryker will also acquire SBi finger, wrist and elbow products, which will further expand Stryker’s upper-extremity offerings.

"The addition of the 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," said David Floyd, group president, Stryker Orthopaedics. "We are dedicated to providing our foot and ankle customers and their patients with a complete set of solutions for their clinical needs."

Closing

The transaction is subject to customary closing conditions, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period.

Upon closing, the transaction is expected to be $0.02 dilutive to Stryker's 2014 earnings per share, excluding acquisition, integration related and intangible amortization charges.

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