Stryker Kicks Off 2014 With Acquisition Deal

Kalamazoo, Mich.-based Stryker Corporation has inked an agreement to acquire Patient Safety Technologies Inc. for $120 million, or about $2.22 per share. Patient Safety Technologies, which is based in Irvine, Calif., conducts its business through its wholly owned subsidiary, SurgiCount Medical, Inc. With the purchase, Stryker will add the company’s proprietary Safety Sponge system and SurgiCount 360 compliance software designed to help prevent retained foreign objects (RFOs) in the operating room, thereby improving patient safety and reducing healthcare costs. The system includes bar-coded surgical sponges and towels, an integrated barcode scanner, and compliance tracking software. Patient Safety Technologies’ 2013 actual revenue through nine months were $14.9 million.

The transaction is expected to close in the first quarter of 2014.

RFOs are the most common operating room “never event,” a term that describes particularly substantial medical errors that should never occur, in the United States. Sponges are the most common retained object, with approximately 2,300 incidents reported annually at an average cost per incident of over $400,000. The SurgiCount Safety-Sponge system is touted to offer a way to eliminate unnecessary costs from the healthcare system while improving quality of care.

Since its launch in 2006, SurgiCount has established a strong customer base of over 300 hospitals including several of the leading medical institutions in the United States. The Safety-Sponge System will become part of Stryker’s Instruments division, and will augment Stryker Instruments’ portfolio of products that are designed to optimize the perioperative experience by reducing hazards, streamlining operations, and improving outcomes for patients and caregivers.

“We are committed to providing solutions that result in a higher quality of care and level of safety for both patients and healthcare professionals,” said Timothy J. Scannell, group president, of Stryker’s MedSurg and Neurotechnology. “This acquisition aligns with Stryker’s focus on offering products and services that have demonstrated cost effectiveness and clinical outcomes.”