UPDATE: Stryker To Buy Ascent Healthcare Solutions For $525
Million
(Updates throughout with details on deal, background, share price.)
By Jon Kamp
Of DOW JONES NEWSWIRES
Stryker Corp. (SYK) announced plans Monday to acquire privately held Ascent
Healthcare Solutions Inc. for $525 million, giving the medical-products maker
the market leader in reprocessing and remanufacturing of medical devices in the
U.S.
Ascent, formed through the 2005 merger of Vanguard Medical Concepts and
Alliance Medical Corp., provides its services to 1,800 hospitals. Its 2008
revenue was more than $100 million.
The deal, slated to close by year's end, isn't expected to affect Stryker's
bottom line next year but should boost per-share earnings thereafter. Stryker
shares recently traded up 1.5% to $50.45.
The deal represents the second-largest acquisition ever for Stryker, following
the $1.65 billion purchase of orthopedic device maker Howmedica from Pfizer Inc.
(PFE) in 1998, and the biggest purchase during the tenure of Chief Executive
Stephen P. MacMillan. He has been CEO for about five years.
Stryker has long talked about using some of its big cash stockpile on
purchases, but hadn't spent much prior to this deal. The company has been
careful not to overpay and has also been wary of smaller companies that appear
to partially generate rapid growth through sales and marketing practices that
don't comply with Stryker's, MacMillan said in a recent interview.
In Ascent, Stryker gains a business for repurposing used medical devices,
which can save hospitals money while cutting down on waste. Ascent offers
products in 35 different medical-device categories including cardiovascular and
orthopedic products.
It will be added to Stryker's business for hospital and surgical products,
known as MedSurg, which has struggled due to a slowdown in hospital spending
sparked by the recession. Stryker's other big business unit sells replacement
orthopedic joints.
"Conducted in accordance with [Food and Drug Administration] regulations,
reprocessing and remanufacturing is one of the most impactful programs in use at
hospitals, allowing for significant cost savings to the health care system,"
MacMillan said in a statement.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com
(Kevin Kingsbury contributed to this article.)
(END) Dow Jones Newswires
11-30-091043ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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