Stryker Announces Agreement to Acquire Sage Products, LLC for $2.775 Billion
Stryker Corporation announces a definitive agreement to acquire Sage Products, LLC from Madison Dearborn Partners in an all cash transaction for $2.775 billion. The transaction includes an anticipated future tax benefit which is expected to exceed $500 million and to positively impact cash flows over approximately 15 years. Sage develops, manufactures and distributes disposable products targeted at reducing adverse events, primarily in the intensive care unit and med/surg hospital unit setting. Sage sales for fiscal 2015 totaled $430 million, up 13 percent over 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," says Kevin A. Lobo, chairman and CEO. "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. Today, through our Medical division, Stryker offers products that are complementary to those produced by Sage. Sage has a 45-year history of focus on patients and caregivers that is evident in their culture and fits well with our Medical division. This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings. We look forward to welcoming the Sage team to Stryker."
Founded in 1971 and headquartered in Cary, Ill., Sage is a leading developer of innovative products and proprietary solutions that are designed to help improve outcomes for patients and clinicians, while maximizing efficiency and profitability for healthcare facilities. Sage's products include solutions for oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel care boots.
"Over our 45 years, we have achieved incredible growth through our focus on innovation, our Sage culture and our deep commitment to our community," says Scott Brown, president and CEO of Sage Products. "With Madison Dearborn's support, our business has grown domestically and we have achieved significant initial success with our international expansion. We are grateful for Madison Dearborn's partnership over the past few years and believe that 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 closing of the transaction is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The transaction is expected to be accretive to Stryker's 2016 adjusted net earnings per diluted share excluding acquisition, integration-related and intangible amortization charges and will continue to be accretive thereafter. Accordingly, we are raising our full year 2016 adjusted EPS guidance by $0.05 to $5.55-5.75. The transaction is expected to close in the second quarter of 2016.
J.P. Morgan Securities LLC served as Stryker's exclusive financial advisor and Sullivan & Cromwell LLP served as outside legal counsel for Stryker in connection with this transaction.
Barclays is serving as Sage's financial advisor and Kirkland & Ellis LLP and Madden, Jiganti, Moore & Sinars LLP are serving as legal counsel for Sage in connection with this transaction.
Source: Stryker
