Stryker Buys Small Bone Innovations In $375 Million Cash Deal

By Jof Enriquez,
Follow me on Twitter @jofenriq

Orthopedics firm Stryker is set to purchase substantially all assets of Small Bone Innovations (SBi) in a cash deal worth up to $375 million, including SBi’s flagship Scandinavian Total Ankle Replacement (STAR Ankle) System and other musculoskeletal extremity products.

The deal, which is expected to be finalized in the third quarter of this year after meeting conventional closing requirements, including the conclusion of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, will cost Stryker $285 million after tax benefits are considered, the company said in a recent press release.

“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,” David Floyd, group president, Orthopaedics, Stryker, said in the press release. “We are dedicated to providing our Foot & Ankle customers and their patients with a complete set of solutions for their clinical needs.”

According to the statement, the STAR ankle system is “the only PMA approved, cementless, three-piece total ankle replacement system and is the most published total ankle replacement product in the world.”

SBI’s finger, wrist, and elbow orthopedic products will also be folded into Stryker’s growing portfolio of upper extremity products, the press release said.

According to Stryker’ statement, SBi’s products had generated combined sales of $48 million in 2013. Pennsylvania-based SBi has operations in France, Germany, and it markets its products in 40 countries.

“This transaction is the next step of growth for Small Bone Innovations’ world-class products — especially the STAR Total Ankle — and is a perfect fit with Stryker’s product suite and global reach of its world-class distribution system,” Michael P. Simpson, president and CEO of SBi, said in prepared remarks.

“With its outstanding worldwide distribution channel, Stryker will now take the STAR Ankle and other SBi products to a wider patient universe and expand positive patient experiences,” SBi founder and former CEO Anthony G. Viscogliosi, said in a separate statement. “We wish Stryker the greatest success.”

The acquisition makes Stryker more competitive in the foot and ankle device market segment. In particular, SBI’s STAR Ankle “fills a noticeable hole in Stryker’s foot and ankle portfolio,” Needham & Co. analyst Michael Matson told The News Tribune.