Stryker to Buy Small Bone Innovations for Up To $357 Million Cash

Stryker Corporation SYK announced today a definitive agreement to acquire assets of Small Bone Innovations, Inc. ("SBi") in an all cash transaction for up to $375 million. The net cost to Stryker after taking into account the present value of the tax benefits as a result of the asset purchase structure will be up to $285 million. Founded in 2004, SBi is a privately held business headquartered in Morrisville, Pennsylvania with facilities in France and Germany. SBi products are designed and promoted for upper and lower extremity small bone indications, with a focus on small joint replacement. The assets to be acquired include the Scandinavian Total Ankle Replacement System (STAR Ankle). The STAR Ankle, sold globally in over 40 countries, is the only PMA approved, cementless, three-piece total ankle replacement system and is the most published total ankle replacement product in the world. With the addition of the STAR Ankle to the Stryker Foot & Ankle product portfolio, Stryker comprehensively addresses the broad range of foot and ankle procedures. Additional assets include finger, wrist, and elbow products, further expanding the existing Stryker upper extremity product offerings. The sales of the acquired products were approximately $48 million in 2013. "The addition of the STAR Ankle strengthens our product offering in this fast growing business, and demonstrates our continued commitment to growth in this segment and more broadly in extremities," said David Floyd, Group President, Orthopaedics. "We are dedicated to providing our Foot & Ankle customers and their patients with a complete set of solutions for their clinical needs." The transaction is subject to customary closing conditions including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. Upon closing, the transaction is expected to be $0.02 dilutive to Stryker's 2014 earnings per share excluding acquisition, integration-related and intangible amortization charges. The transaction is expected to close in the third quarter of 2014.