Stryker, the second largest manufacturer of plastic surgery equipment in the United States, announced on the 25th that it will acquire Mako Surgical (Mako Surgical, NASDAQ: MAKO) and related core technologies for US$1.65 billion. On the same day, Mako's stock price rose more than 82%. Industry insiders pointed out that in recent years, the medical device sector has sprung up and has become more and more optimistic by investors, and its investment prospects even exceed many cutting-edge pharmaceutical stocks. However, some well-known large-scale comprehensive pharmaceutical companies do not have obvious advantages in this field. The acquisition of small and medium-sized companies specializing in a certain technology has become a "shortcut" for them to occupy the market in this field. This "big fish" swallows the "small fish". "The situation will create a win-win situation. In recent years, Chinese related companies have also been increasingly favored by overseas giants. For the former, this is a good opportunity for development. Stryker's large-scale acquisition of the US biomedical sector has performed well this year. The latest statistics from S&P Dow Jones Indices show that among the ten major sectors, the biomedical sector ranks first with a 29.02% increase, which is much higher than that of S&P. The 500 index rose 19.89%. Analysts pointed out that before the market focused more on some cutting-edge pharmaceutical companies, but with the continuous mergers and acquisitions around the medical device sector, this segment is increasingly being valued by investors. The 86% premium rate given by Stryker this time is higher than most previous cases, and Mako jumped to near the purchase price on the day of the acquisition, which proves that the market is generally optimistic.
      According to the agreement reached between the two parties, Stryker will pay $30 per Mako stock, which is an 86% premium to the stock's closing price of $16.17 on the 24th. The two companies valued the transaction at approximately US$1.65 billion. Promoted by this news, Mako's stock price soared by more than 82% at the opening on the 25th, and eventually rose by 82.19% to 29.46 US dollars, which was close to the purchase offer made by Stryker.
Stryker subsequently stated that the transaction still needs to be approved by Mako shareholders. Excluding acquisition and integration expenses, it is expected that the adjusted earnings per share will increase by approximately 10 to 12 cents in the first fiscal year after the completion of the acquisition, which will not have an impact on the earnings of the second fiscal year, but here It will continue to increase its profitability.
Stryker CEO Kevin A. Robb also pointed out: "Mako has achieved remarkable results in the field of robotic assisted surgery technology. We believe that this acquisition will have very bright prospects. Especially in the long run. Look, getting such an excellent company, combined with Stryker’s strong strength and long history, will make the company's fixed equipment and surgical instruments less and less obstacles to the development of the field. I hope that Mako members can quickly integrate into the history. China, create a bright future."
Mako is headquartered in Florida. Its products include the Rio robotic arm interactive orthopedic system and orthopedic implant series. It also recently launched the Makoplasty total hip replacement system.
Overseas giants pay attention to Chinese enterprises. Analysts pointed out that although some comprehensive pharmaceutical companies have a reputation, they may not have obvious advantages in all segments. On the contrary, some professional pharmaceutical companies have an irreplaceable position in a certain field. For the latter, being acquired by the former will undoubtedly increase its influence, and it will also be good for long-term development. Therefore, for both parties, the complementary advantages determine that the relationship between them is a "strong alliance" rather than a simple "merger". In 2012, the US pharmaceutical giant Johnson & Johnson's acquisition of Syndith, a Swiss medical device service company, for US$21.3 billion and more than a year, finally came to an end, and the deal became one of the world's largest mergers and acquisitions. This acquisition not only resolves the competitive situation, but also acquires Syndith's expertise in the field of trauma therapy and a complete sales network, adding orthopedics to its important source of profit.
       Chinese medical device-related companies have also continued to gain favor from foreign giants. In addition to the acquisition of Mako, on January 21 this year, Stryker also acquired the Hong Kong-listed and China's largest orthopedic device company-Chuangsheng Medical at a price of HK$7.5 per share, a premium of 45.3%. Chuangsheng Medical is a leading manufacturer of orthopedic products in China. According to statistics from authoritative organizations, Chuangsheng is the largest manufacturer of trauma products and one of the top three manufacturers of spinal products among Chinese orthopedic product manufacturers in terms of market share.
Medtronic, another American medical technology giant, announced in 2012 that it had acquired a US-listed Chinese concept stock Kanghui Medical for US$816 million, and the product coverage was comprehensive, including trauma, spine, and artificial joint replacement. After the merger, Kanghui was privatized and delisted from the NYSE, becoming Medtronic's first business unit headquartered outside the United States. Medtronic’s move is aimed at accelerating its globalization process. It is positioned relatively high-end compared to Medtronic, and Kanghui’s product prices are relatively economical. This acquisition can help Medtronic expand the low-end market in emerging markets including China. Kang Hui believes that with the help of Medtronic's brand, channels and technological advantages, they believe that its cost-effective products will make a big difference in China and other emerging markets, and eventually occupy an important position in the developed markets led by the United States.