Stryker Announces Definitive Agreement to Acquire Patient Safety Technologies, Inc. for $120 Million
Stryker Corporation announced today a definitive agreement to acquire Patient Safety Technologies, Inc. for $2.22 per share, with an aggregate purchase price of $120 million. Patient Safety Technologies conducts its business through its wholly owned subsidiary, SurgiCount Medical, Inc. The company's proprietary Safety-Sponge® System and SurgiCount 360(TM) compliance software help prevent Retained Foreign Objects (RFOs) in the operating room, thereby improving patient safety and reducing healthcare costs. The System includes bar-coded surgical sponges and towels, an integrated barcode scanner, and compliance tracking software. 2013 actual revenue through nine months are $14.9 million.
RFOs are the most common operating room "Never Event" in the United States. Sponges are the most common retained object, with approximately 2,300 incidents reported annually at an average cost per incident of over $400,000. The SurgiCount Safety Sponge System offers a way to eliminate unnecessary costs from the healthcare system while improving quality of care.
Since its launch in 2006, SurgiCount has established a strong customer base of over 300 hospitals including several of the leading medical institutions in the U.S. The Safety-Sponge System will become part of Stryker's Instruments division's offerings and will augment Stryker Instruments' broad portfolio of products that are designed to optimize the perioperative experience by reducing hazards, streamlining operations, and improving outcomes for patients and caregivers.
"We are committed to providing solutions that result in a higher quality of care and level of safety for both patients and healthcare professionals," said Timothy J. Scannell, Group President, MedSurg and Neurotechnology. "This acquisition aligns with Stryker's focus on offering products and services that have demonstrated cost effectiveness and clinical outcomes."
The transaction is subject to customary closing conditions including approval by the stockholders of Patient Safety Technologies and the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period. The transaction is expected to close in the first quarter of 2014.