UPDATE: Oct. 21, 2019: Stryker said Monday it completed its acquisition of Mobius Imaging and Cardan Robotics.
Spencer Stiles, who heads Stryker’s orthopaedics and spine businesses, said in a statement the deal will allow the company to up its presence in Orthopaedics as well as Spine and Neurotechnology, which generated net sales of $5 billion and $2.6 billion in 2018, respectively, compared to MedSurg's $6 billion. Stryker also augmented the Spine & Neurotechnology unit last year with the $1.4 billion buyout of K2M, manufacturer of spinal surgery devices.
The Kalamazoo, Michigan-based medtech will report third quarter earnings Oct. 29.
- Stryker plans to acquire sister companies Mobius Imaging and Cardan Robotics for $370 million in upfront cash, it announced Wednesday. An additional $130 million is on the table based on completion of certain development and commercial milestones.
- Stryker will gain Mobius' Airo CT scanner, a mobile diagnostic imaging system. FDA first granted 510(k) clearance to an earlier version of the system in 2013, adding a pediatric indication for the product last year. Cardan Robotics was founded in 2015 and is working to develop robotics and navigation systems for surgical and interventional radiology procedures, Stryker said.
- "The acquisition provides Stryker's Spine division with immediate entry into the intra-operative imaging segment and aligns with Stryker’s implant and navigation offerings," the company said in a statement Wednesday.
Stryker follows a slew of medtechs that have aimed to deepen their robotic surgery capabilities this year through acquisitions: Johnson & Johnson bought out Auris Health for $3.4 billion, Intuitive Surgical added Schölly Fiberoptic’s robotic endoscope business, and Siemens Healthineers last month purchased Corindus Vascular Robotics.
The acquisition is also the third announced by Stryker this year, with the company having previously picked up chronic rhinitis device maker Arrinex and rotator cuff tear tech company OrthoSpace. Canadian hospital sterilization product manufacturer TSO3 also last month said it had agreed to be acquired by Stryker.
The deal announced Wednesday is the second major medtech exit for Mobius CEO and co-founder Eugene Gregerson, who previously co-founded Breakaway Imaging, which sold its O-arm imaging system to Medtronic's surgical navigation systems business in 2007.
Stryker's presence in robotics has been mostly centered on its Mako joint replacement platform for total knee, partial knee and total hip procedures, technologies acquired through its $1.65 billion buyout of Mako Surgical in 2013. Stryker said the product line helped drive its recent 9.9% growth in net sales during the second quarter. The expansion into other robotic surgery technologies comes as Zimmer Biomet's Rosa robotic surgery platform has begun to take share in some of Mako's specialties.
Neurotechnology and Spine, Stryker's smallest division, had 7.4% organic growth last quarter. The company made a major investment in the unit last year with the $1.4 billion acquisition of spinal surgery device maker K2M. The strategy of bolstering spine device sales by enhancing spine surgery platforms appears to be working for at least one competitor; Medtronic reported a bump to its spine implant sales in the most recent quarter thanks to adoption of its Mazor robotic surgery platform.
Stryker anticipates the deal will close in the fourth quarter of 2019 and does not expect it to have material impact on full-year net earnings.