Sector News

Stryker to buy orthopedic device maker Wright Medical for $4B

November 5, 2019
Life sciences

Stryker is moving to acquire fellow devicemaker Wright Medical in a $4 billion play to gain a stronger foothold in fast-growing orthopedic segments.

The Amsterdam and Memphis, Tennessee-based Wright Medical posted $836 million in global net sales for 2018, driven largely by its products for the upper and lower extremities—including multiple joint replacement, plating, fixation and fusion systems designed for shoulders, elbows, wrists, ankles and toes.

In its yearly financial report (PDF) for 2018, the company said it expects the global extremities market to grow by 7% to 10% annually, powered by the development of procedure- and anatomy-specific devices as well as an increase in total ankle replacement procedures overall.

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

Wright’s shoulder implants, replacements and accompanying procedure-planning technology would help fill some of the largest gaps in Stryker’s portfolio, comparatively speaking—while its lower extremity offerings would act as more of a complement to Stryker’s foot-focused products. Additionally, Wright would deliver its biologic bone graft, Augment, for ankle fusion indications.

Stryker will offer to buy all of Wright’s outstanding shares for $30.75 each, in cash, for a total equity value of about $4 billion. Including convertible notes and debt, Stryker said the deal has a total enterprise value reaching about $5.4 billion. Wright’s stock price jumped about 30% on the news to about $28.50, while Stryker’s dipped slightly by about 4.5% to $203.20.

The boards of directors of both companies have approved the agreement, which is expected to close in the second half of 2020 after the adoption of certain resolutions by Wright’s shareholders.

By Conor Hale

Source: Fierce Biotech

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