Stryker Acquires Vexim: What’s the Deal?



Deal overview

On October 24, 2017, Stryker (SYK) acquired the majority share capital of Vexim. The acquisition of a controlling stake in Vexim has provided Stryker with an expanded portfolio of minimally invasive technologies. SYK stock fell ~0.15% that day. The Vanguard S&P 500 ETF (VOO), which has a ~0.22% exposure to Stryker, fell ~0.23%.

Following the ~183 million euro deal, Stryker holds 50.7% of the share capital and ~50.3% of the voting rights of Vexim. Stryker will now file an all-cash tender offer for the purchase of the remaining Vexim shares and warrants. The acquisition is expected to be completed in 4Q17. It is expected to be neutral to Stryker’s adjusted diluted EPS (earnings per share) for fiscal 2017.

Vexim’s portfolio is highly complementary to Stryker’s interventional spine business. The below diagram shows Stryker’s diverse business segments. The company has launched a number of new products in the interventional spine business segment recently and is focused on strengthening its position in this space.

Company profile: Vexim

Vexim is a French company listed on France’s Euronext Growth Stock Exchange. Vexim is the leader in minimally invasive spine surgery medical devices in Europe. The company specializes in minimally invasive procedures for the treatment of vertebral fractures. SpineJack, Vexim’s flagship product, is a “mechanical expandable VCF implant for fracture reduction and stabilization,” according to a press release on the acquisition. It is not available in the United States. Vexim anticipates filing for the 510(k) approval for SpineJack in 2018.

In 2016, Vexim registered sales of ~18.5 million euros, representing YoY (year-over-year) growth of ~33%. The company sells its products through a direct sales force in Europe, with sales in Germany, France, Italy, and Spain. It also has a distribution network in some countries in Eastern Europe, Latin America, the Middle East, and Asia.

Other major companies in the medical device industry that are expanding outside the United States through strategic inorganic growth include Abbott Laboratories (ABT), BD (BDX), and Thermo Fisher Scientific (TMO). In the next article, we’ll discuss Stryker’s updated fiscal 2017 guidance.

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