Stryker to Acquire Physio-Control International

Kalamazoo, Michigan-based Stryker Corporation has agreed to acquire 100 percent of the stock of Physio-Control International Inc. in an all cash transaction for $1.28 billion. Physio-Control, which is a portfolio company of Bain Capital Private Equity, makes monitors/defibrillators, automated external defibrillators (AEDs) and CPR-assist devices along with data management and support services. The company was founded in 1955 and has a long history of innovation with products that target urgent patient care, specifically designed to improve survival rates and patient outcomes. The company’s portfolio is highly complementary to Stryker Medical’s EMS (Emergency Medical Services) offering and will drive a greater balance between capital and disposables. Physio-Control also brings an enhanced presence and infrastructure that will expand Stryker’s global footprint. Physio-Control sales for fiscal 2015 totaled $503 million, up 6 percent in constant currency over the prior year.

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

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

“It has been a privilege to work collaboratively with Brian and the management team as the company has shown great progress and built even more enduring customer loyalty,” said Chris Gordon, a managing director at Bain Capital Private Equity. “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. We believe the business is well positioned for further growth, and are confident that Physio-Control will continue to thrive under Stryker’s ownership.”

The closing of the transaction is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The acquisition of Physio-Control is expected to close at the beginning of the second quarter and be slightly accretive to Stryker’s adjusted per share earnings in 2016. The company’s revised adjusted 2016 EPS guidance reflecting the Physio-Control acquisition and the previously announced transactions is now $5.57-$5.77 up 8.8-12.7 percent which includes a 2.5 percent negative foreign exchange rate impact on our adjusted earnings per share. For 2017, Stryker expects the acquisition of Sage and Physio-Control combined will be accretive by $0.15-0.18, net of the negative impact of postponing our share repurchases that were included in our original guidance for 2016.