According to its recent press release, Stryker Corporation has reached an agreement to acquire Sage Products, LLC from Chicago private equity firm Madison Dearborn Partners in a $2.775 billion cash transaction. Stryker describes itself as medical technologies company based in Kalamazoo, Michigan, specializing in orthopedic implants for hip, knee, and other replacement surgeries, as well as various medical-surgical, neurosurgical, and spinal technologies. According to its website, Cary, Illinois-based Sage develops products for prevention of hospital-acquired injuries and infections in patients and clinicians. Sage’s products include solutions for oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel care boots.
Kevin Lobo, Chairman and CEO of Stryker, praised Sage’s “established leadership team and innovative products,” which “have driven consistent double-digit sales growth.” According to Lobo, the two companies share a “focus on offering products and services that support a mindset of prevention, specifically in the area of ‘never events’ such as hospital acquired infections.” The acquisition will “provide a consistent disposable revenue stream that will complement [Stryker’s] capital equipment offerings.”
Scott Brown, President and CEO of Sage Products, stated:
Sage is well-positioned for continued achievement and long-term success with Stryker, a company that understands our business, supports our goals and embraces our values.”
The transaction is expected to bring Stryker future tax benefits of over $500 million, as well as approximately 15 years of increased cash flows. According to Bloomberg, Madison Dearborn Partners will gain nearly 320% in the sale, having invested $350 million in Sage Products 3 years ago. The transaction is expected to close in the second quarter of 2016.