Stryker Corp. has purchased a Canadian hospital bed company for an undisclosed sum.
Kalamazoo, MI–based Stryker announced it has acquired CHG Corp. (London, Ontario) for an undisclosed sum. CHG designs and manufactures low-height hospital beds and accessories to prevent patient falls and sells to acute-care facilities across Canada, the U.S. and the United Kingdom. It was founded in the late 1970s and incorporated as CHG in 2003.
The purchase augments Stryker’s own line of standard height and low hospital beds, plus others for psychiatric, maternity and bariatric use. Stryker began by manufacturing turning frames to ease nursing care of immobile patients who need frequent repositioning. It launched its first electric hospital bed in 1958. CHG recently launched the Spirit One bed, an expandable, low-height, bariatric bed for the acute care segment.
Stryker’s first acquisition announcement of 2015 likely was not the one that medical device market-watchers were expecting. Stryker has reportedly been pursuing Britain’s Smith & Nephew and its $4.4 billion-a-year medical device business off and on for months. The most recent speculation came in November 2014 as a standby period on a potential bid ended.
Smith & Nephew has not been sitting around waiting for its suitor to pop the question. 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.
Stryker's apparent interest in a mega-merger comes amid Zimmer’s pending merger with Biomet for $13.4 billion. 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.
The CHG purchase is expected to be neutral to Stryker's 2015 earnings per share, excluding acquisition, integration-related, and intangible amortization charges, and accretive thereafter.
