K2M Group Holdings Inc., the Leesburg-founded and -based inventor and maker of spinal surgery technology, announced today that it will be acquired by Stryker Corporation, an international maker of medical and surgical equipment based in Kalamazoo, MI.
Stryker has agreed to buy all stock in K2M in an all-cash transaction for $27.50 a share, or a total value of about $1.4 billion. The purchase price represents a 27 percent premium over K2M’s average closing price during the 90 trading days leading up to the agreement. The company has more than 450 employees and reported $258 million in revenue during fiscal year 2017.
Once the deal is complete, K2M will become a wholly owned subsidiary of Stryker Corporation. Post-closing, K2M’s Chairman, Chief Executive Officer, and President Eric D. Major is expected to be appointed as the president of Stryker’s Spine division.
“Joining Stryker will be a very exciting next chapter for our global team and surgeon customers around the world,” Major said in the statement announcing the agreement. “Stryker’s established leadership in the orthopedic and neurosurgical market, combined with K2M’s culture of innovation and leadership in complex spine and minimally invasive solutions, represent a powerful opportunity for Stryker to strengthen its leadership in the $10 billion global spine market.”
“This acquisition underscores our commitment to the spinal market, which is the largest segment of Orthopaedics with significant unmet needs,” stated Kevin A. Lobo, Stryker’s chairman and CEO. “We believe K2M will significantly enhance our presence with surgeons, patients and employees in both the spine and related neurotechnology markets.”
The proposed sale has been approved by the board of directors of both companies. It is expected to close late in the fourth quarter of 2018, subject to customary closing conditions, including approval by regulators and K2M’s stockholders.
Stryker offers medical and surgical products and services in orthopedics, neurotechnology, and spinal surgery among other fields. The company was founded as the Orthopedic Frame Company by Dr. Homer Stryker in 1941, and counts among its patents the first oscillating saw designed to cut hard casts but not skin. In 2017, the company reported more than $12.4 billion in global sales.