Stryker Corp (NYSE:SYK), in a move to strengthen its upper-body joint implants business, will buy smaller rival Wright Medical Group NV (NASDAQ:WMGI) for about $4 billion in cash and another $1.4 billion in debt.
Under the terms of the deal, which has been approved by both companies' boards and is expected to close in the second half of 2020, Stryker will pay $30.75 a share for Wright Medical. That represents roughly a 40% premium over its last closing price on Friday.
Shares of Wright Medical recently traded up 30% to $28.55 on heavy volume in New York. However, Stryker’s stock traded down 4.2% to $203.83 a share
Wright Medical is among the top makers of implants to treat upper-body joint injuries in areas such as the shoulder and wrist as well as lower body, including the foot and ankle.
"We believe this transaction will provide truly unique opportunities and will create significant value for our shareholders, customers and employees," said Wright Medical CEO Robert Palmisano in a statement. "By merging ... we will be able to advance our broad platform of extremities and biologics technologies with one of the world's leading medical technology companies.”
With the acquisition, Stryker will expand its "trauma and extremities business" with Wright Medical's "highly complementary product portfolio and customer base," the companies said.
"This acquisition enhances our global market position in trauma & extremities," said Stryker CEO Kevin Lobo, "while providing significant opportunities to advance innovation."
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