US medical device maker Stryker to buy Sage Products for $2.78 bn

US medical device maker Stryker yesterday struck a deal to buy medical supplies maker Sage Products from private equity firm Madison Dearborn Partners for $2.78 billion in cash in order to expand its patient care products portfolio.

If the deal is concluded, it would be the biggest-ever acquisition for Michigan-based Stryker.

Stryker said the deal includes a future tax benefit in excess of $500 million and could add to cash flows for about 15 years.

Madison Dearborn Partners had acquired Sage in 2012 for a reported $350 million.

Sage had 2015 revenue of $430 million compared to Stryker's 2014 sales of $9.95 billion.
 
Founded in 1971 and based in Illinois, Sage develops products for oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel care boots.

Stryker sells products that are complementary to those produced by Sage, the companies said in a statement.

"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,'' said, Kevin Lobo, chairman and         CEO of Stryker.

''This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings," he added.

Founded by Dr. Homer Stryker as the Orthopedic Frame company in 1946, Stryker is one of the world's leading medical technology companies offering a diverse array of medical devices, including reconstructive implants, medical and surgical equipment, and neurotechnology and spine products.

It competes with DePuy Orthopaedics, Zimmer Holdings, Medtronic, Synthes, Smith & Nephew, and Biomet, and holds a 16-per cent share in the global orthopaedic market.

The company sells its products through local dealers and direct sales force to doctors, hospitals, and other healthcare facilities, as well as through third-party dealers and distributors primarily in the US, Ireland, Germany, France, Switzerland, the UK, Japan, Canada, the Pacific region, and Latin America.

While the US market accounts for the bulk of its sales, Stryker has been recently trying to focus and expand in emerging markets like India, Brazil, and China.

In late 2014, it was rumored that Stryker was exploring a $16-billion bid for British medical-device maker Smith & Nephew Plc.