Stryker To Buy Assets Of Small Bone Innovations For Up To $375 Mln

(RTTNews) - Medical device maker Stryker Corp. (SYK) said Monday that it has agreed to acquire substantially all the assets of privately-held Small Bone Innovations, Inc., including an ankle replacement system, for up to $375 million in cash. Stryker noted that the acquisition of these assets will enable it to bolster its orthopedic portfolio.

Morrisville, Pennsylvania-based Small Bone Innovations or SBi's products are designed and promoted for upper and lower extremity small bone indications, with a focus on small joint replacement. SBi offers a portfolio of products and technologies to treat trauma and diseases in the small bones & joints.

SBi was founded in 2004 by Viscogliosi Brothers, LLC, the New York-based merchant banking firm that specializes in the musculoskeletal/orthopedics sector. The company has facilities in Morrisville, Pennsylvania, Péronnas in France, Donaueschingen in Germany, and Kuala Lumpur in Malaysia. It has sold and distributed its products in 41 countries.

Stryker noted that the assets to be acquired by it from SBi include the Scandinavian Total Ankle Replacement System or STAR Ankle. The product, sold globally in over 40 countries, is the only PMA approved, cementless, three-piece total ankle replacement system.

According to Stryker, the addition of the STAR Ankle to its Stryker Foot & Ankle product portfolio will enable the company to comprehensively addresses a broad range of foot and ankle procedures.

Additional assets that will be acquired by Stryker include finger, wrist, and elbow products, further expanding the company's existing upper extremity product offerings. The sales of these acquired products were about $48 million in 2013.

Stryker noted that the net cost to the company after taking into account the present value of the tax benefits as a result of the asset purchase structure will be up to $285 million. The company expects the transaction to close in the third quarter of 2014.

Upon closing, Stryker expects the transaction to be dilutive to its 2014 earnings by $0.02 per share excluding acquisition, integration-related and intangible amortization charges.

Michael Simpson, President and CEO of SBi, said, "This transaction is the next step of growth for Small Bone Innovations' world-class products - especially the STAR Total Ankle - and is a perfect fit with Stryker's product suite and global reach of its world-class distribution system."

SYK is currently trading at $84.26, up $0.29 or 0.35 percent on a volume of 161,910 shares.