Stryker (NYSE:SYK) has agreed to buy rival Orthovita (NYSE:VITA) for about $316 million in cash in an effort to expand its existing portfolio of orthopedic products.
The orthopedic implant and surgical products maker offered $3.85 a share, which represents a premium of 41% from Orthovita’s closing price on Friday. The company, based in Kalamazoo, Mich., will also assume $12 million in debt.
Based in Malvern, Pa., Orthovita is a specialty spine and orthopedic company that achieved sales last year of $95 million with the help of its synthetic bone grafts and vertebral augmentation products. It also develops biosurgery products such as Vitagel that are designed to control intra-operative and post-operative bleeding.
“With this acquisition we are meaningfully expanding our orthobiologics product portfolio and strengthening our competitive position in key segments of the spine, orthopedics and biosurgery markets,” Stryker CEO Stephen MacMillan said in a statement.
The boards of directors of both companies have approved the transaction, and the Orthovita board has recommended that shareholders tender their shares to Stryker in the offer.
Shareholders holding some 14.5% of Orthovita’s outstanding shares have already agreed to support the transaction.
The tender offer is slated to commence within 10 business days and is expected to close in the second-quarter of 2011. The offer is subject to customary closing conditions, including the tender of a majority of Orthovita’s outstanding shares. Following the deal’s close, Stryker will acquire the remaining shares through a second step merger.
Citi (NYSE:C) served as Stryker’s exclusive financial advisor for the deal.