UPDATED June 30, 2014, with comment from Small Bone Innovations founder.
Stryker (NYSE:SYK) today said it agreed to acquire a total ankle replacement system developed by Small Bone Innovations, plus finger, wrist and elbow products, for roughly $375 million.
The net cost to Stryker is slated to be roughly $285 million "after taking into account the present value of the tax benefits as a result of the asset purchase structure," the company said.
Stryker said the Scandinavian Total Ankle Replacement system included in the deal is the only FDA-approved cementless, 3-piece total ankle replacement device. The STAR device is sold in more than 40 countries, according to a press release. The assets brought in about $48 million in revenues last year for Morrisville, Pa.-based Small Bone Innovations, according to the release.
"The addition of the STAR ankle strengthens our product offering in this fast growing business, and demonstrates our continued commitment to growth in this segment and more broadly in extremities," Stryker orthopedics president David Floyd said in prepared remarks. "We are dedicated to providing our foot & ankle customers and their patients with a complete set of solutions for their clinical needs."
Stryker said the acquisition, expected to close during the 3rd quarter, is expected to dilute its adjusted earnings per share by about 2¢ this year.
"The transaction announced today is emblematic of how Viscogliosi Brothers identifies, develops and grows innovative technologies into market-defining companies that commercialize those technologies into leading products for the orthopedics healthcare sector," Small Bone Innovations founder Anthony Viscogliosi said in a statement. "Further, the success of SBi demonstrates the effectiveness of the VB strategy of creating solutions for unmet medical needs, resulting in superior patient outcomes and business success. With its outstanding worldwide distribution channel, Stryker will now take the STAR ankle and other SBi products to a wider patient universe and expand positive patient experiences. We wish Stryker the greatest success."
