Stryker Buys Wright Medical for $4 Billion

Posted on November 04, 2019 by Medtech[y] Staff

'Merger Monday' continues to live up to its name as Stryker (NYSE: SYK) announced that they have acquired Wright Medical (NASDAQ: WMGI) for $4 billion, or $30.75 per share, which is a 52% premium over the volume-weighted average closing price of Wright's stock over the 30-day period ending on Oct. 31.

What's funny to us at Medtechy is we started noticing unusually high volume on our Wright Medical forums over the weekend. It's unusual as Wright Medical has been a smaller forum for us compared to our Stryker forum, which has historically been much busier. It just shows that the rumor mill picked up in the last several days and insiders were looking for answer.

With that said, many insiders have pondered a deal like this for Wright Medical as far back as three years ago on both the Stryker and Wright Medical forums.

Stryker felt that Wright was a great fit as they have a highly complementary product portfolio and customer base to Stryker’s trauma and extremities business. Wright is also a leader in upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics markets, which are among the fastest growing segments in orthopaedics. Wright currently has global revenue approaching $1 billion.

Stryker also believes that Wright Medical’s leading upper extremity portfolio and advanced preoperative planning technology will significantly add to their portfolio. Additionally, Wright Medical’s lower extremity and biologics will complement Stryker’s portfolio and strengthen the company’s position in this high-growth segment.

“This acquisition enhances our global market position in trauma & extremities, providing significant opportunities to advance innovation, improve outcomes and reach more patients,” said Kevin Lobo, Chairman and Chief Executive Officer, Stryker. “Wright Medical has built a successful business, and we look forward to welcoming their team to Stryker.”

“We believe this transaction will provide truly unique opportunities and will create significant value for our shareholders, customers and employees,” said Robert Palmisano, Executive Director, Chief Executive Officer and President of Wright Medical. “By merging our complementary strengths and collective resources, we will be able to advance our broad platform of extremities and biologics technologies with one of the world’s leading medical technology companies that shares our vision of delivering breakthrough and innovative solutions to improve patient outcomes.”

The acquisition is expected to close in the second half of 2020 and is not expected to impact Stryker’s net earnings per diluted share and adjusted net earnings per diluted share in 2019.