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Stryker acquires defibrillator manufacturer, Physio-Control, for $1.28 billion

by Gail Kalinoski, Contributing Reporter | February 17, 2016
Business Affairs Cardiology Medical Devices
Physio-Control's LIFEPAK 15
Courtesy: Physio-Control
Medical device company Stryker Corp. is on a spending spree this month, announcing plans for a third acquisition, this time for Physio-Control International, Inc., in a $1.28 billion deal that would expand its emergency medical services business.

Physio-Control, based in Redmond, Wash., is a unit of Bain Capital Private Equity that develops, manufactures and markets monitors/defibrillators, automated external defibrillators (AEDs), and CPR-assist devices, along with data management and support services. Founded in 1955, the company’s products target urgent patient care and would be highly complementary to Stryker Medical’s EMS (Emergency Medical Services) offering. The acquisition will also expand Stryker’s global footprint, according to a company news release.

“Physio-Control has achieved global leadership positions with a strong brand and customer-centered solutions that can predict or intervene in life-threatening emergencies,” Kevin A. Lobo, Stryker chairman and CEO, said in the release. “Physio-Control’s focused strategy and their culture fit well within the EMS business of our Medical division, further leveraging our existing call pattern.”

Physio-Control president and CEO Brian Webster said joining Stryker would be an “exciting next step in the evolution of Physio-Control for both our team and customers.”

He added, “Stryker has a deep understanding of capital equipment and of our core market segments. We will build on the success our team has achieved in partnership with Bain Capital, and further accelerate the execution of our strategy, including continued investment in great product solutions for our customers.”

The definitive agreement calls for Stryker, based in Kalamazoo, Mich., to acquire 100 percent of Physio-Control’s stock in an all-cash transaction for $1.28 billion. The deal is expected to close at the beginning of the second quarter and be slightly accretive to adjusted per share earnings in 2016.

Physio-Control had sales of $503 million in fiscal 2015, a 6 percent increase over the previous year. It had been a unit of Medtronic Plc since 1988 before being spun off in 2006, according to Reuters. Bain Capital acquired the company in 2011.

“Physio-Control has added significant operational strength and made substantial investments in R&D to accelerate the development and launch of its next generation product lines,” said Chris Gordon, a Bain Capital managing director. “We believe the business is well positioned for further growth, and are confident that Physio-Control will continue to thrive under Stryker’s ownership.”

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