Analyst: Latest Stryker deal is more than “just another tuck-in acquisition”

September 7, 2019 M&A, Orthopedics, Robotics, Spine, Stryker

Don’t mistake Stryker’s latest $500 million deal in the spine market as a simple tuck-in acquisition, says one analyst while another says it could help Stryker give Medtronic a run for its money.

On Wednesday, orthopedics company Stryker announced that it was buying Mobius Imaging and its sister company, GYS Tech, (which does business as Cardan Robotics), for $370 million upfront cash and up to $130 million in milestone payments.

Per Stryker’s announcement Mobius Imaging, founded in 2008 and based in Massachusetts, is focused on “integrating advanced imaging technologies into medical workflow, which can enhance a clinician’s ability to obtain high-quality images.” Its Airo TruCT scanner is a mobile, real-time, diagnostic-quality CT imaging system. Cardan Robotics, founded in 2015, is developing novel robotics and navigation technology systems for surgical and interventional radiology procedures.

“This acquisition brings expertise in advanced imaging and robotics as well as a robust product pipeline that add to Stryker’s portfolio and will allow the Spine division to provide more complete procedural solutions, including sales, service, and support,” said Spencer Stiles, Stryker’s Group President, Orthopaedics and Spine, in the news release announcing the deal.

On the face of it, it appears that the Kalamazoo, Michigan device company was doing what it has a penchant for — tuck-in acquisitions. However, one analyst believes Wednesday’s announcement has far-reaching ramifications.

“The transaction would have been just another [Stryker] tuck-in but we believe the transaction has broader implications for [Stryker] and its plans in spinal robotics,” wrote Ryan Zimmerman, a research analyst with BTIG, in a research note Thursday. “At a high level we believe investors should view the transaction positively as [Stryker] made another differentiated bet on robotics with the acquisition.”

Another differentiated bet is, of course, a reference to the first bet the company took on robotics when it bought Mako Surgical for $1.65 billion back in 2013. The decision to buy Mako six years ago was bold because none of the larger ortho players had envisioned joint replacement procedures to be done by a robot back then let alone spend a billion dollars to get that capability.

By Arundhati Parmar | MedCity News

Image Credit: Arundhati Parmar | MedCity News

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About Peter Coffaro 504 Articles

Peter Coffaro is a growth-driven and strategic executive with over 25 years of progressive management success in the medical device industry. With a proven track record and recognized expertise, Peter has established himself as one of the top influencers in medical sales, as acknowledged by prestigious publications such as the World Journal of Orthopedics, Exponential Healthtech, and MedReps.com. Throughout his career, Peter has accumulated 10 years of combined sales management experience, excelling in various roles including Director, General Manager, Distributor, and Vice President. He has worked for industry-leading orthopedic companies such as Zimmer, DePuy, and Stryker, solidifying his deep knowledge and network within the field. Peter’s passion for innovation and emerging technologies led him to found OrthoFeed, an award-winning blog covering digital orthopedic news and emerging medical technologies. Through this platform, he stays at the forefront of the industry and contributes to the dissemination of valuable insights. Peter is a three-time Hall of Fame award winner at Johnson and Johnson, demonstrating his exceptional contributions and impact on the organization. His expertise extends to areas such as organizational development, business development, sales management, digital marketing, and professional education. Peter earned a B.S. degree in Biology and Chemistry from Northern Illinois University, further complementing his comprehensive understanding of the medical field. With his wealth of experience, strategic mindset, and dedication to advancing healthcare, Peter Coffaro is a valuable asset and leader in the medical device industry.