SYK Stryker Corp

By Kimberly Chin 

Stryker Corp. said Thursday it has agreed to acquire medical-device company K2M Group Holdings Inc. in a deal valued at about $1.2 billion.

The Kalamazoo, Mich., firm said it would buy all of K2M's shares at $27.50 apiece, a 27% premium over its average three-month closing price. K2M will be incorporated into Stryker's spine division, broadening Stryker's portfolio of spinal therapies, the company said.

Stryker said K2M Chief Executive Eric Major will become head of the division upon the completion of the deal.

Stryker said the deal wouldn't affect earnings this year. It expects to report adjusted earnings of $7.22 to $7.27 this year.

Earlier this year, Stryker completed its acquisition of Entellus Medical Inc., a manufacturer of devices for various ear, nose and throat diseases.

K2M, which was founded in 2004, has become a prominent player in the $10 billion spinal market, Stryker said, through its development of minimally invasive and complex spinal support systems.

Stryker is one of the largest makers of knee- and hip-replacement parts, competing with companies including Johnson & Johnson and Zimmer Biomet Holdings Inc.

Shares of Stryker slipped, while K2M's shares surged 25% in early trading Thursday.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

August 30, 2018 10:01 ET (14:01 GMT)

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