Stryker Corp. in Kalamazoo recently announced an agreement to acquire MAKO Surgical Corp. of Ft. Lauderdale, Fla., for $30 per share, amounting to a purchase price of approximately $1.65 billion.
Stryker said the transaction assumes the issuance by MAKO of almost 4 million additional shares of stock in connection with an anticipated acquisition, which Stryker expects MAKO will finalize as part of MAKO’s normal course of business.
Founded in 2004, MAKO has pioneered the advancement of robotic-assisted surgery in orthopedics and currently manufactures the RIO Robotic Arm Interactive Orthopedic System and the RESTORIS family of implants to enable its flagship MAKOplasty Partial Knee Resurfacing procedure for the treatment of early to mid-stage osteoarthritis.
More recently, MAKO expanded its product line to include the MAKOplasty Total Hip Arthroplasty, a new robotic arm application for patients in need of a total hip replacement.
“MAKO has established a compelling technology platform in robotic-assisted surgery, which we believe has considerable long term potential in joint reconstruction,” said Kevin A. Lobo, president/CEO of Stryker.
“The acquisition of MAKO combined with Stryker's strong history in joint reconstruction, capital equipment (operating room integration and surgical navigation) and surgical instruments will help further advance the growth of robotic-assisted surgery. Our combined expertise offers the potential to simplify joint reconstruction procedures, reduce variability and enhance the surgeon and patient experience. We look forward to welcoming the MAKO team to Stryker.”
MAKO officials said the partnership is a good fit for both sides.
“The combination of Stryker’s established industry leadership with MAKO’s innovative products and people contains the power to positively transform orthopedics,” said Maurice R. Ferré, M.D., president and CEO of MAKO. “It is with this in mind that MAKO's board of directors unanimously voted to recommend that MAKO’s shareholders vote in favor of it.”
The transaction is expected to dilute Stryker’s adjusted earnings per share from acquisition and integration-related charges by approximately 10 to 12 cents in the first full year, neutral in year two and accretive thereafter.
Additionally, the transaction is expected to be slightly accretive to adjusted cash earnings per share, excluding acquisition and integration-related charges in the first full year.
As of June 30, Stryker's cash and cash equivalent balances totaled $4.7 billion, with an additional $2.8 billion in debt.
Citigroup served as Stryker's financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP served as outside legal counsel for Stryker in connection with the transaction.