MAKO Surgical Corp.
) revealed that the company has completed acquisition of its
4-year partner Pipeline Biomedical Holdings. The transaction is
valued at $2.5 million plus 3,953,771 unregistered shares of MAKO
Shares of MAKO hit new 52-week high of $29.69 and closed at
$29.61 yesterday, which represented a whopping year-to-date
return of nearly127.0% and solid one-year return of 77.0%.
Pipeline is attached with robotic assisted surgery developer MAKO
Surgical since 2010. It manufactures orthopedic devices and
related instruments for both robotic devices and medical
procedures and has been supplying implant technologies for MAKO's
advanced robotic arm Robotic Arm Interactive Orthopedic System,
or RIO, which includes RESTORIS PST Cup and Tapered Stem hip
implant system for use with the RIO's MAKOplasty Total Hip
The deal, to some extent, justifies the hefty 85.5% premium paid
) for MAKO Surgical. Based in Fort Lauderdale, Fla., MAKO was
founded in Nov 2004 and generated sales of $102.7 million last
year. The deal will allow SYK to get hold of MAKO's advanced
robotic arm technology, which helps orthopedic surgeons in
performing knee and hip joint replacement surgeries, as well as
Pipeline Biomedical's implant technologies.
Stryker believes MAKO's robotic technology has long-term
potential for human joint reconstruction. MAKO's pioneering RIO
system has not been widely adopted as it should have been, due to
inadequate training and marketing efforts. As a result, SYK
intends to fill up this gap by utilizing its efficient marketing
and training system and gain a competitive edge in the stagnant
hip-and-knee replacement market.
Secondly, post-acquisition, SYK can proceed with the further
implant development for MAKO's technologies utilizing its own
R&D capabilities. MAKO Surgical lack resources compared to
Stryker in developing implants for its systems. Therefore, the
acquisition clearly bridges this gap and enables SYK to meet the
wider joint reconstruction needs.
Currently, MAKO Surgical retains a Zacks Rank #2 (Buy). Other
medical instruments stocks that are also worth a look include
Mindray Medical International Limited
). Both of them carry a Zacks Rank #2 (Buy).
MAKO SURGICAL (MAKO): Free Stock Analysis
MASIMO CORP (MASI): Free Stock Analysis
MINDRAY MEDICAL (MR): Free Stock Analysis
STRYKER CORP (SYK): Free Stock Analysis
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