In what they call “a merger of equals,” York, Pa.-based dental equipment maker Dentsply has entered an agreement to buy Sirona in an all-stock deal valued at roughly $5.5 billion.
The merged companies are projected to have net revenues of approximately $3.8 billion and about 15,000 employees, according to a prepared statement. Dentsply manufactures and distributes dental and other consumable healthcare products, while Long Island, N.Y.-based Sirona makes dental products, such as CAD/CAM restoration systems.
The combined company will be known as Dentsply/Sirona, with global headquarters in York and international headquarters in Salzburg, Austria, home to Sirona’s sales and marketing hub. Sirona’s President and CEO Jeffrey Slovin will serve as chief executive of the merged companies, while Bret Wise, chairman and CEO of Dentsply, has been tapped as executive chairman.
During a conference call, executives were asked why Dentsply decided to enter this deal more than a decade after exiting the dental equipment business. Wise explained that previously, Dentsply was in a niche area, and this deal will expand its reach.
“What we’re doing today is we’re combining the strongest player in dental technologies and dental equipment with the strongest player in dental consumables, and it’s clear that the market is trending toward increased use of integrated systems, digital technologies and consumables that can do more when combined with equipment,” he explained.
The transaction is expected to close in the first quarter of 2016.
Moody’s Investors Service rated the deal credit positive.
The deal comes weeks after the release of a report that found that full-year M&A activity in the medical device arena could exceed $100 billion for the first time, particularly with close of megadeals, such as Medtronic/Covidien (). During the first half of the year, the total value of closed medtech mergers came in at $83 billion, according to the report from EP Vantage. — Elizabeth Hollis