Stryker’s Minimally Invasive Acquisitions

For a company that has targeted minimally invasive surgical products of late, Stryker Corporation (NYSE: SYK) has been highly visible in the acquisition arena this year. It started in February 2016. That month, the medical device giant announced three deals, totaling $2.03 billion. In April, three more acquisitions were announced, with only one disclosed price of $40.6 million. Halfway through September, the company has made two more acquisitions, for undisclosed prices. For those keeping score, that’s eight deals for approximately $4.1 billion.

Stryker’s most recent deals have targeted Ivy Sports Medicine, LLC for its minimally invasive meniscal repair platform, and Restore Surgical LLC, dba Instratek. Instratek, develops, manufactures and markets minimally invasive surgical technologies, including orthopedic implants and endoscopic instruments for the field of extremity surgery. In April, it acquired Safewire‘s product portfolio, including the Y-wire guidewire and Tiger Jamshidi Needle Family, for use in minimally invasive surgery. Financial terms for these deals were not disclosed.

The company’s checkbook opened for a couple of pricey deals with private equity firms. Madison Dearborn Partners sold its portfolio company, Sage Products, LLC, for nearly $2.8 billion in cash. Sage develops, manufactures and distributes disposable products aimed to reduce events such as hospital-acquired infections, primarily in the intensive care and medical/surgical hospital units. Bain Capital sold Physio-Control International for nearly $1.3 billion. Physio-Control’s portfolio includes monitors and defibrillators, automated external defibrillators and CPR-assist devices, together with data management and support services.

Stryker also made deals with publicly traded companies that were looking to shed unwanted divisions from previous acquisitions. Valeant Pharmaceuticals (NYSE: VRX) flipped the neurosurgery product portfolio it acquired in October 2015 when it bought Synergetics USA, Inc. (NASDAQ: SURG) for $164 million. At the time, Synergetics made precision surgical devices primarily for ophthalmology and neurosurgery. Valeant wanted the ophthalmology side to bolster its Bausch+Lomb division. Selling the neurological surgical devices made sense, especially with a new management team at the helm.

BD (NYSE: BDX) attracted Stryker in April, with its portfolio of minimally invasive systems used in vertebroplasty and vertebral augmentation procedures. BD acquired these assets as a part of CareFusion‘s (NYSE: CFN) portfolio in March 2015. BD paid $12.2 billion for CareFusion, which specialized in critical care technologies. BD’s goal was to create a global leader in medication management and patient safety products. Spinal surgery didn’t fit into those plans, obviously.

Stryker may keep on buying in 2016, but it’s really making up for a very quiet 2015, when the company sat on the M&A sidelines and watched others making deals. With eight deals announced so far in 2016, however, we think Stryker will spend much of 2017 integrating its new product lines.

 

 

 

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