Stryker Buys Small Bone Innovations

Orthopedic and medical equipment maker Stryker Corp. is buying bone and joint replacement maker Small Bone Innovations (SBI) for up to $375 million in cash.

Stryker said the deal will cost it as much as $285 million after tax benefits.

Currently headquartered in Morrisville, Pa., SBI was founded 10 years ago and designs products which are used in small bones and joints to address and treat trauma and diseases. In addition to its headquarters in Morrisville, it also has facilities in France, Germany and Malaysia.

Last year, SBi had approximately $48 million in sales, according to Stryker.

“The addition of the [Scandinavian Total Ankle Replacement System, also called the STAR ankle] strengthens our product offering in this fast growing business, and demonstrates our continued commitment to growth in this segment and more broadly in extremities,” noted the president of orthopedics at Stryker, David Floyd, in the announcement. “We are dedicated to providing our foot and ankle customers and their patients with a complete set of solutions for their clinical needs.”

The press release noted that the cementless three-piece ankle replacement product is available in more than 40 countries.

In addition to the STAR Ankle, Stryker is buying from SBi a variety of replacement products that are used in fingers, wrists and elbows. As a result of the acquisition Stryker highlighted this would allow its foot and ankle product portfolio to address the broad range of procedures across small bone extremities.

Needham & Co. analyst Michael Matson said the purchase makes Stryker more competitive in the foot and ankle device market, and STAR Ankle “fills a noticeable hole in Stryker’s foot and ankle portfolio.”

SBI is owned by well-known orthopedic entrepreneurs and investors, Viscogliosi Brothers LLC, a New York, N.Y.-based merchant banking firm that specializes in the musculoskeletal/orthopedics sector.

“This transaction is the next step of growth for Small Bone Innovations’ world-class products— especially the STAR total ankle—and is a perfect fit with Stryker’s product suite and global reach of its world-class distribution system,” said Michael P. Simpson, president and CEO of SBI.