Medical Device Maker Stryker Sets Eye on China

Stryker Corporation (Stryker, Kalamazoo, MI, USA) has agreed to buy Trauson Holdings (Hong Kong) for USD 764 million in cash to expand in China, one of the fastest-growing markets for medical products.

With the acquisition, Stryker will expand its presence with a product portfolio and pipeline that is targeted at a large and fast growing segment of the Chinese orthopedic market. Under the terms of the agreement, Stryker will make a voluntary general offer to acquire all the shares of Trauson in an all cash transaction, representing an enterprise value of approximately USD 685 million. Trauson's controlling shareholder, Luna Group, has undertaken to accept the offer from Stryker by tendering 61.7% of the Trauson shares toward the offer.

Founded in China in 1986, Trauson had sales in 2011 approximating USD 60 million, and it is the leading trauma manufacturer in China and a major competitor in the spine segment. Stryker and Trauson have maintained a relationship under an original equipment manufacturer (OEM) agreement for instrumentation sets since 2007. Trauson’s research and development expertise, manufacturing capabilities, and strength of its distribution network could provide Stryker with a vehicle to drive growth in China and other emerging markets.

“The acquisition of Trauson is a critical step toward broadening our presence in China and developing a value segment platform for the emerging markets through a well-established brand,” said Kevin Lobo, president and CEO of Stryker. “The acquisition of a leading player in the Chinese trauma and spine market underscores our commitment to strengthening our presence globally.”

“I am very proud to have worked with everyone associated with Trauson to build the company from its beginning 27 years ago into the largest orthopedic products producer in China,” said Trauson Chairman Fuqing Qian. “The orthopedics market in China has great growth potential. The combined scale, local and global expertise, complementary product offerings, and market breadth of Trauson and Stryker will create significant competitive advantages in the increasingly dynamic orthopedic, industry and provide a platform to fully realize the future growth opportunities in China and globally.”

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

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