Stryker To Acquire Sage Products For $2.775 Bln; Raises 2016 Adj. EPS View

(RTTNews) - Stryker Corp. (SYK) said that it agreed to acquire Sage Products, LLC from Madison Dearborn Partners in an all cash transaction for $2.775 billion. The transaction includes an anticipated future tax benefit which is expected to exceed $500 million and to positively impact cash flows over approximately 15 years.

Stryker raised its full year 2016 adjusted earnings per share guidance by $0.05 to $5.55- $5.75. Analysts polled by Thomson Reuters expect the company to report earnings of $5.59 per share for fiscal year 2016. Analysts' estimates typically exclude special items.

Sage develops, manufactures and distributes disposable products targeted at reducing "Never Events," primarily in the intensive care unit and MedSurg hospital unit setting. Sage sales for fiscal 2015 totaled $430 million, up 13% over the prior year.

The closing of the transaction is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

The transaction is expected to be accretive to Stryker's 2016 adjusted net earnings per share excluding acquisition, integration-related and intangible amortization charges and will continue to be accretive thereafter.

The transaction is expected to close in the second quarter of 2016.