Stryker To Acquire Sage Products From Madison Dearborn Partners For $2.775 Billion

Stryker Corporation (NYSE: SYK), a leading medical technology company, announced on Monday it will acquire Sage Products, LLC from Madison Dearborn Partners for $2.775 billion in cash.

Shares of Stryker were trading lower by 0.56 percent at $98.59 mid-Monday afternoon.

Sage is a developer of innovative products and proprietary solutions to help improve outcomes for patients and clinicians. The company's products include solutions for oral care, skin preparation and protection, patient cleaning and hygiene, among others.

Stryker stated in its press release that the transaction includes a future tax benefit which is expected to exceed $500 million and positively impact its cash flows over the next 15 years. Given the positive impact, the company raised its full year 2016 earnings per share guidance by $0.05 to $5.55 to $5.75 (versus a consensus estimate of $5.59 per share).

"The company's established leadership team and innovative products that help prevent hospital acquired conditions have driven consistent double-digit sales growth," stated Kevin A. Lobo, Chairman and Chief Executive Officer. "This acquisition aligns with Stryker's focus on offering products and services that support a mindset of prevention, specifically in the area of "Never Events" such as hospital acquired infections. Today, through our Medical division, Stryker offers products that are complementary to those produced by Sage. Sage has a 45-year history of focus on patients and caregivers that is evident in their culture and fits well with our Medical division. This business will also provide a consistent disposable revenue stream that will complement our capital equipment offerings. We look forward to welcoming the Sage team to Stryker."