Stryker, the Michigan-based medical device company, recently announced its acquisition of Sage, an intensive care product manufacturer. Stryker paid $2.76B to acquire Sage. The acquisition allows Stryker access to Sage’s main customer base, hospitals. Stryker will be better able to market its own products through these connections.
Stryker, the Michigan-based medical device company, recently announced its acquisition of Illinois-based Sage Products, Inc., an intensive care product manufacturer. Stryker paid $2.76B to acquire Sage. The acquisition allows Stryker access to Sage’s main customer base, hospitals. Stryker will be better able to market its own products through these connections.
The multi-billion dollar acquisition of 45-year old Sage should be complete by the end of 2016’s second quarter. Stryker should realize a $500M tax benefit from the acquisition, according to The Wall Street Journal. Stryker’s finance folks should be very happy; Sage adjusted its 2016 earnings to $5.75 per share, following 2015 sales of $430M. Stryker is expecting a huge boost in disposable revenue.
Kevin Lobo, CEO of Stryker, said the Sage acquisition is part of his company’s international expansion plan. Stryker has been working on building an international presence for some time now. CNBC reported that Lobo said to expect more such deals soon. “One of the reasons to postpone the share repurchase program was to make sure we still have the capacity, so this will not be the last deal that we do.”
Sage’s focus has been on creating disposable intensive-care products for hospital use in patient cleaning, from oral care to skin care. Its products play a big role in controlling infections in the patient population. Stryker’s product line is equally diverse, ranging from hip and joint replacement products to surgical devices and patient-handling equipment.
Scott Brown, President and CEO of Sage, issued a statement praising the acquisition as good for business. He said that Stryker “understands our business, supports our goals and embraces our values.” It is unclear what will be Brown’s role after the acquisition is completed.
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