BY Richard Summerfield
Medical device manufacturer Stryker Corp has announced that it will acquire smaller rival Wright Medical Group in a deal worth $5.4bn, including convertible notes.
Under the terms of the deal, Wright shareholders will receive $30.75 in cash per share, giving the deal an equity value of $4bn. The agreed price represents a premium of 39.7 percent to the company’s close price on Friday. The boards of both companies have approved the deal, which is expected to close in the second half of 2020, subject to customary closing conditions and pending regulatory approval.
“This acquisition enhances our global market position in trauma & extremities, providing significant opportunities to advance innovation, improve outcomes and reach more patients,” said Kevin Lobo, chairman and chief executive of Stryker. “Wright Medical has built a successful business, and we look forward to welcoming their team to Stryker.”
“We believe this transaction will provide truly unique opportunities and will create significant value for our shareholders, customers and employees,” said Robert Palmisano, executive director, chief executive and president of Wright Medical. “By merging our complementary strengths and collective resources, we will be able to advance our broad platform of extremities and biologics technologies with one of the world’s leading medical technology companies that shares our vision of delivering breakthrough and innovative solutions to improve patient outcomes.”
By acquiring Wright Medical, Stryker will expand its “trauma and extremities business” through Wright Medical's “highly complementary product portfolio and customer base”, the companies said in a statement. Stryker also believes the deal will strengthen its trauma and extremities business in “the fastest growing segments in orthopaedics”.
Founded in 1950, Wright Medical manufactures implants to treat injuries to parts of the body including the shoulders, elbows and ankles, and has recorded global sales approaching $1bn.
The deal is the latest in a series of mergers in the medical device industry. In recent years, 3M agreed to buy wound-care maker Acelity for $6.7bn including debt, and Boston Scientific acquired BTG for £3.3bn in cash.
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