Stryker to Acquire Physio-Control for $1.3B

Acquisition-hungry Stryker has agreed to buy Physio-Control in an all-cash transaction worth almost $1.3 billion, in a deal that marks the second billion-dollar-plus acquisition in as many weeks.

The Kalamazoo, Mich.-based device giant will gobble up the company, which develops, manufactures and markets monitors and defibrillators, automated external defibrillators and CPR-assist devices.

Physio-Control, a portfolio company of Bain Capital Private Equity, had $503 million in sales last year, according to Stryker.

Word of the plans to acquire Physio-Control — announced Feb. 16 — came just days after Stryker announced that the company will buy Synergetics USA’s neuro portfolio.

The portfolio includes the Malis generator, Spetzler Malis disposable forceps and Stryker’s existing Sonopet tips and RF generator. The Synergetics’ portfolio achieved sales in 2015 of roughly $31 million.

Terms of the Synergetics deal were not disclosed.

However, on Feb. 1, Stryker said it will acquire Sage Products for roughly $2.8 billion. Sage develops, manufactures and distributes a range of products, covering oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel care boots (IDDM, Feb. 5).

Lawrence Biegelsen, a senior analyst with Wells Fargo Securities, says Stryker plans to stay active with acquisitions, despite $4 billion of deals in two weeks.

“Stryker believes that it still has sufficient capacity under its strong balance sheet to pursue other deals and is committed to maintaining its investment grade rating. While we think that Stryker could add several more billion in debt and maintain its investment grade rating, we would expect any near-term acquisitions to be smaller in size than Sage and Physio-Control,” he says. — Elizabeth Hollis and Jonathon Shacat