Stryker Corp. announced Monday that it will acquire Physio-Control International, a maker of vital-sign monitors and defibrillators, for $1.28 billion.
Physio-Control's monitor, defibrillator and cardiopulmonary resuscitation-assist devices are expected to complement Stryker's emergency medical services offerings, which include ambulance cots and cot equipment, stair chairs and healthcare-facility evacuation equipment. Physio-Control has been owned by Bain Capital Private Equity since 2011, when it bought the company from Medtronic.
Physio-Control's products are the second-biggest source of EMS spending after ambulance cots, and most of its products share the same customer base as Stryker's EMS offerings, said Stryker's CEO Kevin Lobo during a conference call Tuesday morning. Physio-Control reported $503 million in sales in fiscal 2015, up 6% in constant currency from the prior year.
The deal is expected to close at the beginning of the second quarter, and be slightly accretive to Stryker's 2016 earnings. Based on that, and a postponed share-repurchase program, Stryker revised its 2016 earnings per share guidance to $5.57 to $5.77, up from 8.8% to 12.7% from the year before.
Stryker expects the acquisition of Physio-Control, combined with its earlier $2.8 billion deal for Sage Products, will affect 2017 earnings per share by $0.15 to $0.18, after the negative impact of postponed share repurchases that were originally included in 2016 guidance.
In other recent company news, Stryker Chief Financial Officer William Jellison announced in January that he would retire after the first quarter. The company reported $522 million in fourth-quarter earnings, and $1.4 billion for fiscal 2015, both up significantly from the year before.