Medical device maker Stryker to buy Hong Kong's Trauson for $764 million

Thu Jan 17, 2013 6:31am EST

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(Reuters) - Medical device maker Stryker Corp (SYK.N) said it will buy Hong Kong-based Trauson Holdings Co Ltd 0325.HK for $764 million in cash to expand in China, one of the fastest-growing markets for orthopedic products.

Stryker will pay HK$7.50 ($0.97) for every share of Trauson. The offer is at a premium of about 45 percent to Trauson's closing price on January 8, when the shares were halted on the Hong Kong Stock Exchange.

Founded in China in 1986, orthopedics firm Trauson had sales of about $60 million in 2011 and makes spine devices and products for trauma surgeries.

"With its research and development expertise, manufacturing capabilities and strength of its distribution network, Trauson is a compelling opportunity for Stryker to drive growth in China and other emerging markets for years to come," Stryker CEO Kevin Lobo said in a statement.

Stryker, which has a market capitalization of nearly $23 billion, makes surgical implants, spine devices and various other medical equipment.

Trauson's controlling shareholder, Luna Group, has agreed to tender 61.7 percent of Trauson shares.

Barclays Capital advised Stryker on the deal, which is expected to close by the end of the second quarter.

The deal is expected to be neutral to Stryker's 2013 earnings, excluding related charges, and will add thereafter.

Stryker shares have risen about 12 percent over the last six months and closed at $59.43 on the New York Stock Exchange on Wednesday.

Shares of Trauson have more than doubled over the last year.

($1 = 7.7527 Hong Kong dollars)

(Reporting by Esha Dey in Bangalore; Editing by Saumyadeb Chakrabarty and Don Sebastian)

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Comments (1)
MikeBarnett wrote:
This is a good move for Stryker because Trauson has been averaging growth of 35% for several years, and the increasing age and wealth of China’s population means that they will need and be able to afford Trauson’s implants. Stryker cut 1,170 jobs in the US last November, citing Obama’s healthcare plan. With the US House in budget cutting mode and the uncertainties in the US economy, US citizens may not be able to afford the medical implants that Stryker makes in the future.

My partners and I have a biomedical research facility in Tianjin, southeast of Beijing, and our former team sergeant from Vietnam has been one of our first patients. Decades of hard living will do that to you. It is always good to see medical companies moving into the neighborhood because the team and I may need their services in the future. Stryker offers a mechanical approach while we grow replacement parts using stem cells. US legal actions over stem cells caused us to move this project to China. We will see which approach works better.

Jan 17, 2013 11:46am EST  --  Report as abuse
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