Health Care and Manufacturing

Medical device supplier makes $1.28B acquisition

February 16, 2016
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Kalamazoo-based Stryker is a maker of medical devices and equipment with global operations, including its Endoscopy division in San Jose, California. Photo via wikimedia.org

A supplier of medical devices and equipment is planning to enhance its emergency medical services business through a $1.28-billion acquisition.

Kalamazoo-based Stryker said today that it has signed a definitive agreement to acquire 100 percent of the stock of Physio-Control International, headquartered in Redman, Washington, in an all-cash transaction.

The deal is expected to close at the beginning of the second quarter.

Physio-Control, which is a portfolio company of Bain Capital Private Equity, develops, makes and markets monitors/defibrillators, automated external defibrillators, or AEDs, and CPR-assist devices, along with data management and support services.

The company was founded in 1955 and has a long history of innovation with products that target urgent patient care, specifically designed to improve survival rates and patient outcomes.

Physio-Control sales for fiscal 2015 totaled $503 million, up 6 percent in constant currency over the prior year.

Stryker said Physio-Control’s portfolio is highly complementary to Stryker Medical's EMS offerings and will “drive a greater balance between capital and disposables.”

Physio-Control also brings an “enhanced presence” and “infrastructure” that will expand Stryker's global footprint.

Kevin Lobo, chairman and CEO of Stryker, said Physio-Control’s “focused strategy” and “culture” will fit well within the EMS business of Stryker’s Medical division, “further leveraging our existing call pattern.”

"Physio-Control has achieved global leadership positions with a strong brand and customer-centered solutions that can predict or intervene in life-threatening emergencies,” Lobo said.

Brian Webster, president and CEO of Physio-Control, said Stryker has a “deep understanding of capital equipment” and of “our core market segments” in predicting the success the acquisition will bring.

Chris Gordon, a managing director at Bain Capital Private Equity, said Physio-Control has added “significant operational strength” and made “substantial investments” in research and development to “accelerate the development and launch of its next-generation product lines.”

“We believe the business is well positioned for further growth and are confident that Physio-Control will continue to thrive under Stryker's ownership,” Gordon said.

Skadden, Arps, Slate, Meagher & Flom is serving as outside legal counsel for Stryker in connection with the transaction.

Citi and Jefferies acted as financial advisors and Kirkland & Ellis served as legal counsel to Bain Capital.

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