Stryker is strengthening its sports medicine portfolio through its latest acquisition. The Kalamazoo, MI-based company flexed its M&A muscle by paying $110 million up front, plus an additional $110 million in milestones to acquire OrthoSpace.
Founded in 2009,Caesarea, Israel-based OrthoSpace is developing InSpace, a product for the treatment of massive irreparable rotator cuff tears. The technology is a biodegradable sub-acromial spacer, which is designed to realign the natural biomechanics of the shoulder. In the U.S., InSpace is currently under clinical study and not approved for use.
“The acquisition of OrthoSpace is highly complementary to our existing portfolio and aligns with Stryker’s focus on investing in sports medicine,” said Andy Pierce, Stryker’s Group President, MedSurg. “We are excited about the momentum OrthoSpace has in key global markets and the additional surgical option this technology provides our customers to address a complex pathology.”
The transaction is expected to have an immaterial impact to net earnings in 2019.
The Kalamazoo, MI-based company was extremely active with M&A in 2018. One of the company’s largest target acquisition bids of 2018 was $1.4 billion for K2M. Recall that K2M was one of the top 25 most attractive medtech companies on the M&A radar.
During a recent conference call, Kevin Lobo Chairman and CEO of Stryker said M&A would continue to be important for the company.
“It is our number one source and planned to use of cash,” Lobo said according to a transcript from Seeking Alpha. “In six years, I would expect us to continue to be acquisitive.”