Stryker Corp. (SYK) agreed to acquire Mako Surgical Corp. (MAKO)
for roughly $1.65 billion, a move that will provide the orthopedics
product maker with access to Mako's robotic assisted surgery
platform.
Mako shareholders will receive $30 a share, a 86% premium to its
Tuesday closing price. Mako is expected to issue an additional 4
million shares in connection with the deal. Shares surged 82% to
$29.46 premarket.
Mako makes a surgeon-interactive robotic arm designed to allow
surgeons greater prediction with a partial knee or total hip
replacement procedure called Makoplasty.
Stryker President and Chief Executive Kevin A. Lobo said Stryker
thinks that Mako's technology platform has "considerable long-term
potential in joint reconstruction".
"Our combined expertise offers the potential to simplify joint
reconstruction procedures, reduce variability and enhance the
surgeon and patient experience," Mr. Lobo added.
Makers of orthopedic products, which have been hurt as economic
worries led some people to delay surgeries, have seen some signs of
strengthening in the joint-reconstruction market recently. Stryker
has said it expects revenue growth for the overall U.S.
hip-and-knee market to rise in the low- to midsingle-digit
range.
Stryker also aiming to recover from a series of problems related
to some of its devices that have resulted in some product
recalls.
The acquisition is expected to reduce Stryker's adjusted
per-share earnings by about 10 cents to 12 cents in the first full
year after it closes, be neutral in the second year and add to the
bottom line after that.
Spokesmen for the companies weren't immediately available to
provide further comment.
Stryker shares closed at $70.83 and were inactive premarket.
Write to Tess Stynes at tess.stynes@wsj.com
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