Stryker Corp. is still on the prowl for acquisitions, although it isn’t naming names, the company’s CEO told analysts this week.
Kalamazoo, MI–based Stryker Corp. has been eyeing British company Smith & Nephew Plc and its $4.4 billion-a-year medical device business since last year, but hasn’t made any formal moves.
"Right now we are pursuing the acquisition deal flow, and we'll see what happens," Stryker CEO Kevin Lobo said, in a Tuesday fourth quarter earnings call transcribed by Seeking Alpha. "We do plan to put our money to work."
The manufacturer of artificial hips and knees and other hospital products saw a 33% drop in its Q4 2014 profits from Q4 2013, to $260 million, or 67 cents per share. Recalls of its Rejuvenate and ABGII hip implant systems, plus expenses from relocating a regional headquarters to Amsterdam, contributed to the financial hit, according to chief financial officer Bill Jellison.
Sales increased 6.1% to $2.62 billion in the quarter.
For its part, Smith & Nephew has seemed content to go its own way. Since his arrival at the company in 2011, CEO Olivier Bohuon has been redirecting the company’s emphasis on hip and knee replacements toward innovations in one of its oldest businesses—wound care.
Styker's apparent interest in a mega-merger comes amid Zimmer Holdings Inc.’s pending $13.4-billion merger with Biomet, Inc. Combined, Zimmer and Biomet would have enough strength to surpass Stryker in size in the global orthopedics market, knocking Stryker down to third place, according to EvaluateMedTech, a market intelligence firm.
In November, Zimmer agreed to extend the European Commission’s review of its merger with Biomet “by a limited number of days,” according to a statement to Zimmer investors.
The agreement extends the EU’s probe beyond its March 11, 2015 deadline, Zimmer said. The company expects to close the cash-and-stock transaction in the first quarter of 2015.
