Stryker Acquires Synergetics' Neurosurgical Portfolio
In its second deal this month, Stryker has snapped up Synergetics’ neurology portfolio in an all-cash transaction. Synergetics specializes in microsurgical instruments for ophthalmic and neurological applications, and currently manufactures electrosurgical generators and disposable neurosurgical tools as part of its OEM relationships with both Stryker and Johnson & Johnson (J&J). Pending approval of the deal, these assets will transfer to Stryker.
Last October, Synergetics was acquired by Canada’s Valeant Pharmaceuticals in a deal worth $190 million. This deal expanded Valeant’s portfolio of ophthalmic surgery products, complementing its previous acquisition of Bausch & Lomb in 2013.
Synergetics, which retained its name as a wholly owned subsidiary of Valeant, is looking to divest its neurosurgical portfolio, which includes the Malis generator for electrosurgery and Spetzler Malis disposable forceps, which are distributed by J&J’s neuro business, Codman. Also included are disposable tips and other consumable products used in conjunction with Stryker’s Sonopet ultrasonic aspirator.
According to a press release, Synergetics OEM product portfolio of neuro products generated $31 million in 2015.
“The acquisition of the Synergetics neuro portfolio is highly complementary to Stryker Instruments’ Neuro Spine & ENT business and is aligned with NSE’s strategy of expanding its neurosurgical product offering,” said Timothy Scannell, Group President of the MedSurg and Neurotechnology division at Stryker.
Stryker recently expanded its offering of patient safety products with the $2.78 billion acquisition of Sage Products, a move expected to provide Stryker with a “consistent disposable revenue stream.” In the announcement, Stryker CEO Kevin Lobo commented that it “will not be the last deal that we do” in 2016.
Lobo commented in an earnings call that Stryker’s first priority for cash on hand was acquisitions, though he was not specific about potential deals or timetables. “Right now, we’re pursuing the acquisition deal flow,” he said, “and we’ll see what happens.
For decades, analysts have traded rumors that a Stryker takeover of British medtech Smith & Nephew (S&N) was inevitable. This year, the chatter continues about a potential Stryker offer that would put a 30 percent premium on S&N’s share price. As yet, no offer has been announced.
Stryker’s deal with Synergetics is expected to close in the first quarter of 2016, and though the terms were not disclosed, the company expects it to be revenue neutral to Stryker’s 2016 adjusted earnings per share.