Stryker (NYSE:SYK) said today that it inked a deal to pay nearly $2.78 billion for Sage Products and its line of disposable devices designed to reduce so-called “never events” in intensive care and surgery settings.
Cary, Ill.-based Sage makes products for oral care, skin preparation & protection, patient cleaning & hygiene, turning & positioning and heel care. Sales for the company, which is owned by private equity firm Madison Dearborn Partners, grew 13% to $430 million last year, Stryker said.
“The company’s established leadership team and innovative products that help prevent hospital acquired conditions have driven consistent double-digit sales growth,” Stryker chairman & CEO Kevin Lobo said in prepared remarks. “This acquisition aligns with Stryker’s focus on offering products and services that support a mindset of prevention, specifically in the area of ‘never events’ such as hospital-acquired infections. Today, through our medical division, Stryker offers products that are complementary to those produced by Sage. Sage has a 45-year history of focus on patients and caregivers that is evident in their culture and fits well with our Medical division. This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings. We look forward to welcoming the Sage team to Stryker.”
“Over our 45 years, we have achieved incredible growth through our focus on innovation, our Sage culture and our deep commitment to our community,” Sage president & CEO Scott Brown. “With Madison Dearborn’s support, our business has grown domestically and we have achieved significant initial success with our international expansion. We are grateful for Madison Dearborn’s partnership over the past few years and believe that Sage is well-positioned for continued achievement and long-term success with Stryker, a company that understands our business, supports our goals and embraces our values.”
Stryker said the deal for Sage, expected to close during the 2nd quarter, is expected to add to adjusted earnings per share this year and down the road. That prompted the Kalamazoo, Mich.-based company to boost its adjusted EPS outlook by 5¢, to $5.55 to $5.75.
J.P. Morgan Securities is advising Stryker on the deal, with Sullivan & Cromwell as legal counsel. Sage is being advised by Barclays.