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Stryker Sniffs Out a Tuck-In Opportunity for ENT

Stryker has agreed to acquire Entellus Medical for about $662 million, a deal that would enhance the company's ear, nose, and throat device portfolio.

Stryker has agreed to acquire Entellus Medical, a company focused on minimally invasive treatments for various ear, nose, and throat (ENT) disease states, for about $662 million ($24 a share).

Plymouth, MN-based Entellus has a broad portfolio of ENT products, including the XprESS multi-sinus dilation system and the Latera absorbable nasal implant, which Stryker said will complement its existing ENT device portfolio.

Stryker expects the deal to be dilutive to its 2018 adjusted net earnings per diluted share by roughly $0.04 and accretive thereafter. 

The news didn't seem to move the Kalamazoo, MI-based stock [NYSE: SYK], which closed Thursday at $151.15, a 0.40% dip from its opening price. Entellus shareholders, on the other hand, seemed more enthusiastic, judging by the nearly 50% jump the stock took [NASDAQ: ENTL] to close the day at $23.99 a share.

Tuck-in acquisitions like Entellus are consistent with Stryker's M&A track record. CEO Kevin Lobo made it clear during the company's 2016 fourth-quarter earnings call in January that the company would be actively looking for acquisitions in 2017 and that it had the financial capacity and bandwidth across its divisions to do more deals.  

In September, Stryker closed its $701 million acquisition of Novadaq, a developer of fluorescence imaging technology that provides surgeons with visualization of blood flow in vessels, and related tissue perfusion in cardiac, cardiovascular, gastrointestinal, plastic, microsurgical, and reconstructive procedures.

In late October, the company announced plans to acquire Vexim, a French company that makes vertebral compression fracture solutions.

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