Stryker Launches Tender Offer - Analyst Blog
31 5월 2011 - 7:00PM
Zacks
Orthopedic devices giant
Stryker Corp (SYK) has commenced its $3.85 per
share tender offer for its previously announced acquisition of
orthobiologic and biosurgery products maker
Orthovita Inc (VITA).
The Michigan-based devices maker
struck a deal on May 16 to buy Pennsylvania-based Orthovita for
$316 million in cash. Per the agreement, shareholders of Orthovita
will receive $3.85 for each share they hold, representing roughly
41% premium over Orthovita’s closing price of $2.73 on May 13.
The transaction has been cleared by
the Boards of both companies. Moreover, Orthovita’s Board
recommended its shareholders to tender their shares. Shareholders
holding roughly 14.5% of Orthovita’s outstanding shares have
already committed to tender their shares.
Stryker launched the tender offer
through its indirect wholly owned subsidiary Owl Acquisition
Corporation. The offer, which is slated to expire at midnight June
24, 2011, is subject to the tender of a majority of the outstanding
shares of Orthovita and other customary closing conditions.
Following completion of the tender offer and the satisfaction (or
waiver) of all conditions, Owl Acquisition Corporation will merge
with Orthovita.
Orthovita, with annual sales of $95
million, is a leader in synthetic bone grafts and competes in the
$5 billion orthobiologics (substances that help heal injuries)
market. The company’s orthobiologic product range includes the
Vitoss bone graft substitute and the Cortoss bone augmentation
material. Moreover, its Biosurgery business offers hemostasis
products including the Vitagel surgical hemostat.
The acquisition is a strategic fit
for Stryker, highly complementing its existing orthobiologics
offering while strengthening its competitive position. Upon
fruition, the deal is expected to be neutral to the company’s
adjusted earnings per share for 2011.
We believe that Stryker is well
placed for growth driven by new product launches, acquisitions and
an improving hospital capital spending backdrop. However, the
company remains exposed to stiff competition and pricing and
procedure volume pressure on its hip, knee and spine products. Our
long-term Neutral recommendation on Stryker is supported by a
short-term Zacks #3 Rank (Hold).
STRYKER CORP (SYK): Free Stock Analysis Report
ORTHOVITA INC (VITA): Free Stock Analysis Report
Zacks Investment Research
Orthovita, Inc. (MM) (NASDAQ:VITA)
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Orthovita, Inc. (MM) (NASDAQ:VITA)
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