Stryker Maintains Growth Momentum With Strategic M&A, Robotic Surgery Roll-Out

Stryker Maintains Growth Momentum With Strategic M&A, Robotic Surgery Roll-Out

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January 26, 2017 – By Suzanne Hodsden

Stryker Corporation delivered its fourteenth straight quarter with double-digit growth in net sales in 2016’s fourth quarter, building on the rest of the year’s momentum and staggered roll-out of MAKO surgical robots, said CEO Kevin Lobo. Despite its pair of billion-dollar acquisitions — Sage Products and Physio-Control — Lobo said Stryker is “actively” seeking new strategic growth through acquisitions.

Despite “tough” year-over-year comparisons, Lobo reported in an earnings call that Q4 represented 2016’s highest growth quarter, with 16.2 percent growth across all of Stryker’s core businesses: orthopedics, medsurg, and neurotechnology and spine. The company experienced its largest sales bump in medsurg, with a staggering 31 percent for the quarter.

Earlier in 2016, Stryker completed a series of acquisitions, including a $2.78 billion deal for Sage Products — manufacturer of disposable hospital supplies designed to prevent hospital-related infections — and a $1.28 billion deal for Physio-Control, with its portfolio of emergency services equipment. Despite heavy R&D investment in both segments, the two acquisitions delivered 11.8 percent and 7.4 percent Q4 growth, respectively.

“We continue to complete value creating acquisitions, our globalization efforts are bearing fruit, and we are also building capability to deliver consistent leveraged earnings,” said Lobo.

Moving forward, Lobo said that he has not ruled out further investment and growth opportunities, and that the volume of M&A activity in 2016 is not indicative of a slowdown in 2017. While certain segments took on the job of the two large acquisitions, other divisions “certainly have the bandwidth” to accommodate additional deals.

 

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