Dive Brief:
- Stryker has completed its acquisition of spinal surgery device-maker K2M Group Holdings for about $1.4 billion, the Fortune 500 medtech giant announced Friday morning.
- The close of the deal comes after Stryker re-filed its premerger notification to allow for time to come to an agreement with plaintiffs who brought lawsuits to disclose supplemental information. The plaintiffs subsequently voluntarily dismissed the two lawsuits, according to an earlier 8-K.
- The Kalamazoo, Michigan-based medical device firm says that the K2M acquisition will augment its own spine and neurotechnology offerings and allow it to grow its global presence.
Dive Insight:
The finalization of the deal comes two days after K2M shareholders approved the Stryker acquisition in a special meeting. The same day, K2M announced the Federal Trade Commission granted early termination of the HSR Act waiting period, one of the final steps toward closing the merger.
The close of the K2M deal comes shortly after it completed its acquisition of Invuity, a surgical lighting company, for $189.6 million.
K2M posted second quarter revenue of $73.6 million, but posted a net loss of $10.8 million. The company's U.S. complex spine unit accounted for $21.8 million of that revenue, an increase of 7% year over year, while its domestic minimally invasive surgery unit contributed $8.7 million, a decrease of 1% year over year.
"K2M's broad product portfolio and robust pipeline complement Stryker's leadership in the spine and neurotechnology markets," Spencer Stiles, Stryker neurotechnology, instruments and spine group president, said in a statement. "We believe that our combined businesses will offer innovative solutions for our customers while expanding our global footprint."
On Stryker's third quarter earnings call, Stryker strategy and investor relations vice president Katherine Owen said K2M CEO Eric Major will be joining Stryker as president of its spine division.
"Eric's longstanding relationships with thought leading surgeons as well as his history of driving a strong sales execution culture is expected to optimize the integration and execution of the combined group," Owen said. "With the addition of K2M's proven product portfolio, consistent track record of execution and robust pipeline, Stryker spine business will be well-positioned to sustain innovation and provide our customers and employees with proven product."
Stryker CEO Kevin Lobo added that "this is a deal that makes sense for us. It will really improve our growth trajectory in our spine business."
