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John R. Fischer, Senior Reporter | January 12, 2022
Stryker is set to acquire Vocera Communications for over $3 billion
Stryker has agreed to take over Vocera Communications for a total enterprise value of approximately $3.09 billion.
With Vocera, Stryker plans to enhance communication between caregivers as well as disparate data sources among different medical devices. It expects that both companies together will help reduce cognitive overload for caregivers and help drive efficiencies and improve safety and outcomes in patient care.
The total equity value of the deal will be approximately $2.97 billion, and the combined business is expected to help Stryker’s focus on preventing adverse events throughout the continuum of care.
The deal is a fraction of Stryker's enterprise value of $110 billion,
reports Seeking Alpha.
“Vocera will help Stryker significantly accelerate our digital aspirations to improve the lives of caregivers and patients,” said Kevin Lobo, chair and chief executive officer of Stryker, in a statement.
Vocera offers both software and hardware solutions and the ability to securely allow patients to remotely communicate with their families, which Stryker sees as complementary to its Advanced Digital Healthcare offerings. Among Vocera’s solutions are Ease, an app that enables nurses to scan and send the patient's medical bracelet information anywhere in the hospital; and Secure Texting for traceable, HIPAA-compliant text and voice communication among care teams.
Stryker also has a range of digital healthcare solutions, from SmartRobotics to patient-specific planning products, to device management systems. It recently
launched the world's only wireless hospital bed.
Called ProCuity, the bed connects to nurse call systems without cables or wires and allows for improved workflow efficiencies and safety, and lower hospital costs. It is expected to reduce in-hospital patient falls by 50%. The Vocera Platform, a workflow solution designed to collate data from multiple clinical and operation hospital systems, is integrated with ProCuity and sends out alerts about changes in patient positioning to help staff react fast.
Stryker will start the transaction with a tender cash offer for all outstanding shares of common stock of Vocera for $79.25 per share. The boards of directors for both companies have unanimously approved the transaction.
According to Seeking Alpha, Stryker already has more than $10 billion in debt on its balance sheet and could have used its expensive stock (EV/EBITDA of 24) to purchase Vocera. It instead opted to pay all cash for the deal, and is paying 12 times sales and a whopping 69 times forward EBITDA for the organization.
The deal is expected to close in the first quarter of 2022 and is expected to have a neutral impact on net earnings per diluted share for the year.
Stryker referred HCB News to its press release and said that "until closing, Stryker and Vocera Communications remain separate and independent companies."
