Stryker Corporation (Kalamazoo, MI) has announced a definitive agreement to acquire assets from Small Bone Innovations Inc. (Sbi), a privately held company headquartered in Morrisville, PA, in an all-cash transaction for up to $375 million.

Stryker says that after taking into account the present value of the tax benefits as a result of the asset purchase structure, their net cost will be up to $285 million.

The assets Stryker has agreed to acquire include SBi's Scandinavian Total Ankle Replacement System, referred to as the STAR Ankle. Sbi says their STAR Ankle, sold globally in over 40 countries, is the only PMA approved, cementless, three-piece total ankle replacement system. It is also said to be the most published total ankle replacement product in the world.

With the addition of the STAR Ankle to Stryker's foot & ankle product portfolio, the company will comprehensively address a broad range of foot and ankle procedures. Additional assets Stryker will acquire include finger, wrist, and elbow products that will further expand their existing upper-extremity product offerings. The sales of the acquired products were approximately $48 million in 2013.

"The addition of 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," said David Floyd, group president, Orthopaedics. "We are dedicated to providing our foot and ankle customers and their patients with a complete set of solutions for their clinical needs."

SBi was founded in 2004. The company designs products that are used in small bones and joints to address and treat trauma and diseases. In addition to its headquarters in Morrisville, the company also has facilities in France and Germany.

Stryker says that provided the acquisition meets the usual regulatory approval and closing conditions, it expects the purchase will close in the third quarter of this year. The company also noted that as a result of the purchase, its earnings per share will be reduced by $0.02 in 2014.

Stephen Levy is a contributor to Qmed and MPMN.

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