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Stryker Buying Wright Medical Group in $4 Billion Deal

Stryker

by Tyler Hale

Medical technology company Stryker Corporation is acquiring Wright Medical Group in a $4 billion transaction. The total enterprise value of the acquisition, once debt is factored in, is estimated at $5.4 billion.

According to Stryker chairman and CEO Kevin Lobo, the Kalamazoo, Mich.-based company is buying Wright Medical, which produces medical devices primarily for extremities and biologics, to complement Stryker’s own extremities and trauma divisions. Stryker also produces a range of orthopaedic medical technology in categories ranging from joint replacement, foot and ankle, sports medicine, spine and more.

“This acquisition enhances our global market position in trauma & extremities, providing significant opportunities to advance innovation, improve outcomes and reach more patients,” Lobo said in a statement. “Wright Medical has built a successful business, and we look forward to welcoming their team to Stryker.”

The terms of the transaction provide that Stryker will purchase “all of the issued and outstanding shares of Wright Medical Group” at $30.75 per share. At the opening of trading today (Nov. 4), the value of Wright Medical stock was $28.61 per share.

The announcement of Wright Medical Group’s purchase drove the stock’s value up significantly. At the close of trading on Friday, Nov. 1, the stock was valued at $22.01 per share.

Wright Medical Group stock (Monday, Nov. 4)

In its 2018 annual investors report, Wright Medical reported that the company had $836 million in nets sales and increased its organic revenue growth by 12 percent. However, Stryker’s stock actually fell with the announcement. Opening at $206 per share, Stryker’s stock is currently trading at approximately $204.15 per share at the time of press.

Stryker Corporation stock (Monday, Nov. 4)

“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 Officer 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.”

Wright Medical announced a range of new products in its 2018 report. For upper extremities, it offers the REVIVE Revision Shoulder, ORTHOLOC SPS Shoulder Fracture, PERFORM Reversed Glenoid, SIMPLICITI Shoulder System, and BLUEPRINT 3D Planning. Its lower extremities division has the CARTIVA SCI synthetic Cartilage Implant, PROstep MIS (minimally invasive surgery), INVISION Revision Ankle System with PROPHECY, ORTHOLOC 3Di Ankle Fracture LP System, and SALVATION 2 Limb Salvage Line Extensions. Its biologics division announced an AUGMENT injectable.

Company officials expect the transaction to close during the second half of 2020.

Stryker has two locations in Arkansas – one in Little Rock and one in Jonesboro.

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