Stryker to Acquire Orthovita for $316M
BY LAUREN UZDIENSKI, MAY 16, 2011
Orthovita announced this morning that the company agreed to be acquired by Stryker for $3.85 per share in cash, which represents a 41% premium to Friday's close and a 58% and 67% premium to the 30-day and 60-day volume weighted average stock prices. The total deal is valued at $316 million, which the company says is the "largest single upfront payment for an orthobiologics company." Baxter paid $240 million in cash up front for ApaTech in 2010, with potential of additional milestone payments of up to $90 million.
Orthovita develops and manufactures a range of biologics products, including Vitoss, a beta-TCP bone graft substitute that the company calls the most porous ceramic graft on the market, the bone cement Cortoss, for use in VCF procedures and the hemostats Vitagel and Vitasure. The company recorded $94.4 million in sales over the last 12 months, making the purchase offer equivalent to about 3x sales. The Orthovita tender offer is expected to be completed in 2Q:11.
This transaction represents a step forward for Stryker's orthobiologics portfolio, which has been dealt some very public blows over the last few years, particularly related to OP-1. An FDA panel voted the BMP-7 product not approvable for broad spine indications, and the company was also investigated over alleged off-label promotion for the product. Stryker ultimately divested OP-1 last year in a deal with Olympus.
