), the leading medical device provider in the global orthopedics
market, announced its second acquisition after MAKO Surgical
Corp. However, the news failed to impress investors as the stock
price slipped 0.7% yesterday.
SYK decided to buy Irvine, CA-based
Patient Safety Technologies
) in order to utilize Patient Safety's device to lessen the risk
of surgical sponges being left in patients after surgery. The
deal is locked at $120 million.
Stryker will pay $2.22 per share for Patient Safety, which
reflects a fat 50% premium of its closing price on Dec 30. The
deal is approved by the PSTX Board of Directors and is expected
to close in the first quarter of 2014.
Stryker completed its acquisition of MAKO Surgical for $1.65
billion last month. The acquisition of MAKO will allow SYK to get
hold of the latter's advanced robotic arm technology known as
Robotic Arm Interactive Orthopedic System, or RIO. The technology
helps orthopedic surgeons in performing knee and hip joint
Stryker is excited about inheriting MAKO's robotic technology as
the company believes it has long-term potential for human joint
reconstruction. It is worth to note in this context that MAKO's
pioneering RIO system has not been widely adopted as it should be
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, Stryker can proceed with the further implant
development for MAKO's technologies utilizing its R&D
capabilities. MAKO 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
Currently, Stryker retains a Zacks Rank #4 (Sell). Some
better-ranked stocks in the medical products industry include
NanoString Technologies, Inc.
LeMaitre Vascular, Inc.
), both with a Zacks Rank #2 (Buy).
LEMAITRE VASCLR (LMAT): Free Stock Analysis
NANOSTRING TECH (NSTG): Free Stock Analysis
PATIENT SAFETY (PSTX): Get Free Report
STRYKER CORP (SYK): Free Stock Analysis
To read this article on Zacks.com click here.