Stryker Corp. signed a definitive agreement to buy Sage Products LLC, a maker of disposable products for hospital intensive care, medical and surgical units, for $2.77 billion in cash.
The Kalamazoo-based Stryker (NYSE: SYK) is buying Sage Products from private equity firm Madison Dearborn Partners in Chicago. The Cary, Ill.-based Sage Products had sales of $430 million in 2015, a 13-percent increase from the prior year.
“The company’s established leadership team and innovative products that help prevent hospital-acquired conditions have driven consistent double-digit sales growth,” Stryker Chairman and CEO Kevin Lobo said in a statement. “This acquisition aligns with Stryker’s focus on offering products and services that support a mindset of prevention, specifically in the area of ‘never events’ such as hospital-acquired infections.”
Pending anti-trust review, the deal is expected to close in the second quarter. Stryker estimates the acquisition will add to net earnings for the year and raised its 2016 expectations by 5 cents to $5.55 per share to $5.75 per share.
Stryker (NYSE: SYK) last week reported 2015 sales growth of 2.8 percent in 2015 to $9.67 billion. Fourth quarter sales increased 3.7 percent to $2.7 billion.
U.S. sales for 2015 grew 8.5 percent to $7.11 billion, when international sales declined 9.2 percent to $2.83 million.
The maker of orthopaedic implants and medical devices and equipment reported annual net income of $1.43 billion, or $3.78 per diluted share. Quarterly net income totaled $522 million, or $1.38 per diluted share.