KALAMAZOO — Stryker Corp. plans to buy health care software company Vocera Communications Inc. for nearly $3 billion.
The deal announced today will add to the Kalamazoo-based Stryker’s Medical division with a product portfolio that connects nurses and other hospital caregivers with digital devices that monitor and collect data on patients.
The acquisition will make Stryker a leader in an emerging and fast-growing market for digital devices used in care settings, Stryker Chairman and CEO Kevin Lobo.
That’s a market now approaching $1 billion and growing at 15 percent annually, according to a Stryker investor presentation that noted just 35 percent of U.S. hospitals use some form of advanced communications solutions, “leaving ample room for further adoption and penetration” with a $3 billion to $5 billion market opportunity.
“We are tremendously excited about the opportunity to bring Vocera into Stryker and achieve category leadership in this fast-growing segment of digital care coordination and communication,” Lobo said in a conference call this morning to discuss the deal.
“With Vocera part of our company, we will be better positioned to serve and improve the lives of health care professionals by enabling hospitals to enhance the quality of their care and improve operational efficiency,” he said. “These are critical needs that have recently been magnified by the impacts to hospital staffing, driven by the ongoing pandemic.”
Vocera, founded in 2000 and based in Santa Monica, Calif., represents a “logical adjacency” that further diversifies Stryker’s business unit that sells medical and surgical equipment to hospitals, Lobo said.
Under the terms of their agreement, Stryker (NYSE: SYK) will mount a tender offer for all outstanding shares of common stock held by shareholders at Vocera (NYSE: VCRA) for $79.25 per share in cash. Directors at both corporations have unanimously approved the deal, which executives expect to close in the first quarter and is pending a federal regulatory review.
Vocera Communications in October reported $63.5 million in revenue and $2 million in net income for the third quarter of 2021, an increase of 18 percent from a year earlier. Year-to-date revenue totaled $168.4 million with a $7.8 million net loss.
Stryker’s investor presentation today forecasted Vocera to report $226 million to $233 million in full-year revenue for 2021.