Published in Breaking News

Stryker to acquire spinal device maker for $1.4 billion

BY MiBiz Staff Thursday, August 30, 2018 10:59am

KALAMAZOO — Stryker Corp. signed a deal to pay $1.4 billion to acquire Leesburg, Va.-based K2M Group Holdings Inc., a maker of spinal devices.

Under the definitive agreement, the Kalamazoo-based Stryker (NYSE: SYK) will buy all outstanding shares of K2M Group Holdings (Nasdaq: KTWO) for $27.50 per share. The acquisition, which is subject to regulatory review and approval by K2M shareholders, could close late in the fourth quarter.

“This acquisition underscores our commitment to the spinal market, which is the largest segment of orthopaedics with significant unmet needs,” Stryker Chairman and CEO Kevin Lobo said in a statement. “We believe K2M will significantly enhance our presence with surgeons, patients and employees in both the spine and related neurotechnology markets.”

Founded in 2004, K2M Group Holdings this month reported second quarter sales of $73.6 million, a 12-percent increase from the same period in 2017. Midyear sales totaled $141.4 million, up 10.9 percent from the first half of last year.

K2M Group Holdings expects 2018 sales of $288 million to $291 million with a net loss of $34.2 million to $38.2 million. The company lost $37.1 million in 2017.

Citigroup Global Markets Inc. served as financial adviser to Stryker, which was represented by outside legal counsel at Skadden, Arps, Slate, Meagher & Flom LLP.

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