Stryker Corp., the Kalamazoo, Mich.-based medical equipment and technology company, is making a push into preventive products for hospital-acquired infections with a $2.8 billion deal to acquire Sage Products.
Sage's portfolio includes turning and positioning systems for preventing pressure ulcers, oral hygiene products for preventing hospital-acquired pneumonia, and bathing products for preventing urinary-tract infections, among others.
Private equity firm Madison Dearborn Products has held a majority stake in the Cary, Ill.-based company since December 2012.
Sage will be folded into Stryker's medical division but continue to operate under its own name and existing leadership. Stryker's medical division sells surgical equipment, operating room technology and hospital furniture and beds. The company's other two divisions include orthopedics as well as neurotechnology and spine.
Hospital-acquired infections have been a key area of focus for hospitals, which face penalties for falling in the bottom quartile on patient-safety measures. A total of 758 hospitals saw their Medicare payments reduced by 1% during the second year of the Affordable Care Act.
Stryker's Sage purchase is expected to close in the second quarter and have an immediate effect on Stryker's earnings this year. The company added $0.05 to its 2016 earnings per share guidance and is now forecasting an earnings per share range of $5.55 to $5.75.
On an earnings call last week, Stryker executives reiterated a strong interest in acquisitions, though they remained vague about specific deals.
Stryker reported $3.9 billion in net sales in its medsurg division during 2015, an increase of 3% year over year.
Across the company, net earnings for 2015 increased to $1.4 billion on $9.9 billion in net sales, compared with $515 million on $9.7 billion in net sales for 2014.