By RTT News, September 25, 2013, 08:52:00 AM EDT
(RTTNews.com) - Medical technology company Stryker Corp. ( SYK ) Wednesday said it signed a definitive agreement to acquire medical device company MAKO Surgical Corp. ( MAKO ) for $30 per share, with an aggregate purchase price of about $1.65 billion.
In pre-market activity, Stryker shares are currently trading at $69, down $1.83 or 2.58 percent, while MAKO shares are at $29.65, up $13.48 or 83.36 percent.
The transaction is subject to customary closing conditions, including MAKO stockholder approval. Upon the closure, Stryker expects the deal to be dilutive to its adjusted earnings per share, excluding acquisition and integration-related charges by approximately $0.10 to $0.12 in the first full year, neutral in year two and accretive thereafter.
Stryker also expects the acquisition to be slightly accretive to adjusted cash earnings per share, excluding acquisition and integration-related charges in the first full year. As of June 30, Stryker's cash and cash equivalent balances totaled $4.7 billion with an additional $2.8 billion in debt.
The deal contemplates the issuance by MAKO of an additional 3.953 million shares, which Stryker expects MAKO will consummate as part of MAKO's normal course of business.
MAKO, which was founded in 2004, markets the RIO Robotic Arm Interactive Orthopedic System, joint specific applications for the knee and hip, and proprietary RESTORIS implants for orthopedic procedures called MAKOplasty Partial Knee Resurfacing procedure for the treatment of early to mid stage osteoarthritis.
The company noted that MAKO most recently expanded its product offering to include the MAKOplasty Total Hip Arthroplasty, a new robotic arm application for patients in need of a total hip replacement.
Kevin Lobo, Stryker's President and Chief Executive Officer, said, "MAKO has established a compelling technology platform in robotic assisted surgery which we believe has considerable long term potential in joint reconstruction."
In the transaction, Citigroup served as Stryker's financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as its outside legal counsel.
J.P. Morgan is acting as financial advisor to MAKO and Wachtell, Lipton, Rosen & Katz and Foley & Lardner LLP are acting as legal advisors.
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