Stryker Corporation (NYSE:SYK) announced today a definitive agreement to acquire privately held Gaymar Industries. Under the terms of the agreement, Stryker will acquire Gaymar Industries for approximately $150 million in an all-cash transaction.
Gaymar specializes in support surface and pressure ulcer management solutions as well as the temperature management segment of the healthcare industry, with an attractive portfolio of capital and disposable products in both the U.S. and international markets. The closing is conditioned on clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The boards of directors of both Stryker and Gaymar Industries have approved the transaction. Gaymar Industries was founded in 1956 and has been owned by private equity firms Nautic Partners and Norwest Equity Partners since 2003. Stryker’s Medical division and Gaymar have had a successful 10-year original equipment manufacturer (OEM) relationship whereby Gaymar has been providing Stryker with exclusive rights to sell support surface and pressure ulcer management products into the North American acute care market.
The acquisition broadens Stryker’s presence in the high-performance support surface and pressure ulcer management market, while also providing a complementary product offering to its existing customer base through its temperature management technology platform. Following the global economic contraction in late 2008 and early 2009, which adversely impacted hospital spending, Gaymar refocused its management and business strategy and has since demonstrated an impressive recovery consistent with its history as a growing specialty products company. Gaymar achieved sales of approximately $77 million in 2009, of which approximately $14 million were related to the existing OEM relationship with Stryker.
“The acquisition of Gaymar Industries is consistent with our strategic goal of leveraging our existing product offering and extensive sales force presence via innovative and value added products,” said Stephen P. MacMillan, Chairman, President and Chief Executive Officer of Stryker. “In addition to a talented team, Gaymar provides our Medical division with an attractive portfolio of high-performance support surface and pressure ulcer management products that target an approximately $1.8 billion worldwide market, while simultaneously enhancing our customer relationships through the addition of their temperature management offering.”
“We are thrilled to become part of Stryker and broaden the availability of our clinically proven products,” said Kent Davies, CEO of Gaymar. “The integration of our complementary product portfolio will strengthen Stryker’s leadership position in the patient-handling market while driving innovations that can help prevent adverse events and reduce healthcare costs. Through Stryker, we will provide more opportunities to our employees, our customers and the patients that we serve.”
Upon closing, the transaction is expected to be neutral to Stryker’s 2010 and 2011 earnings per share and accretive thereafter. The transaction is expected to close by October 1, 2010.
This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause the Company’s actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: the Company’s ability to consummate the acquisition of Gaymar Industries; weakening of economic conditions that could adversely affect the level of demand for Gaymar Industries products; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect the FDA’s approval of Gaymar Industries products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; changes in the competitive environment; and other risks and uncertainties contained in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Stryker is one of the world’s leading medical technology companies and is dedicated to helping healthcare professionals perform their jobs more efficiently while enhancing patient care. The Company provides innovative orthopaedic implants as well as state-of-the-art medical and surgical equipment to help people lead more active and more satisfying lives. For more information about Stryker, please visit www.stryker.com.