Why Stryker Is Buying Wright Medical For $5.4 Billion

By Annie Baker ● Nov 10, 2019
  • Kalamazoo-based medical equipment company Stryker recently announced it is buying Wright Medical for $5.4 billion. These are the details about the deal.

Kalamazoo, Michigan-based Stryker recently announced that it is buying all of the issued and outstanding ordinary shares of global medical device company Wright Medical Group N.V. for $30.75 per share or a total equity value of about $4 billion and a total enterprise value of about $5.4 billion (including convertible notes). Stryker is buying the outstanding ordinary shares in cash.

Wright Medical — which was originally founded in 1950 — is bringing a complementary product portfolio and customer base to Stryker’s trauma and extremities business. And Wright Medical’s global sales are approaching $1 billion as the company is considered a leader in the upper extremities (shoulder, elbow, wrist, and hand), lower extremities (foot and ankle) and biologics markets. These are some of the fastest-growing segments in orthopedics.

Wright Medical’s leading upper extremity portfolio and its advanced preoperative planning technology will significantly boost Stryker’s offerings. Plus Wright Medical’s lower extremity and biologics will complement Stryker’s portfolio and strengthen the company’s position in this segment.

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

The acquisition of Wright Medical is expected to close in the second half of 2020 and it is expected to have no impact to Stryker’s net earnings per diluted share and adjusted net earnings per diluted share in 2019. And there is no change to Stryker’s previously announced expected adjusted net earnings per diluted share for the full year — which is a range of $8.20 – $8.25.

“We believe this transaction will provide truly unique opportunities and will create significant value for our shareholders, customers and employees,” added 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 board of directors of Stryker and Wright Medical have approved the transaction. And the closing of the transaction is subject to receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an extraordinary general meeting of Wright Medical shareholders, and completion of the tender offer and other customary closing conditions.