Medical device supplier makes $2.7B acquisition
A supplier of medical devices and equipment is acquiring a company that makes products focused on reducing and preventing hospital-acquired infections.
Stryker in Kalamazoo said today that it has signed a definitive agreement to acquire Sage Products of Cary, Illinois from Madison Dearborn Partners for $2.775 billion in an all-cash deal.
The transaction includes an anticipated future tax benefit, which is expected to exceed $500 million and positively impact cash flows over about 15 years.
Sage, founded in 1971, develops, makes and distributes disposable products targeted at reducing "never events," including hospital-acquired infections, primarily in the intensive care unit and MedSurg hospital unit setting.
Sage's products include solutions for oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel-care boots.
Kevin Lobo, chairman and CEO of Stryker, said the acquisition aligns with Stryker's focus on offering products and services that support a “mindset of prevention,” specifically in the area of never events.
Lobo said Stryker’s Medical division offers products that are “complementary” to those produced by Sage.
Lobo noted the acquisition will provide a “consistent disposable revenue stream” that will “complement our capital equipment offerings.”
He credited Sage’s “established leadership team” and “innovative products” with driving consistent double-digit sales growth.
Sage sales for fiscal 2015 totaled $430 million, up 13 percent over the prior year.
Scott Brown, president and CEO of Sage Products, said Sage is well positioned for long-term success with Stryker.
He said the company understands Sage’s “business, supports our goals and embraces our values."