Stryker Corporation SYK recently signed an agreement to acquire SafeAir AG, a Swiss medical device company that provides innovative surgical smoke evacuation solutions. Financial terms related to the deal are still under wraps.
Notably, Stryker boasts a comprehensive portfolio of surgical smoke evacuation. The company’s coveted Neptune E-SEP Smoke Evacuation Pencil provides a two-in-one solution for electrosurgery and smoke evacuation. The company also developed PneumoClear, which is the first all-inclusive integrated heating, humidification and smoke evacuation platform available in the market.
Per a study by Avante Health Solutions, inhaling surgical smoke can cause serious health hazards to patients and clinicians. Per the study, about 500,000 health care workers are exposed to risks related to surgical smoke every year.
Hence, Stryker’s latest move is a timely and strategic one.
Per management, this acquisition is highly complementary to the surgical instruments product line and is likely to boost Stryker’s core MedSurg and Neurotechnology segments. Moreover, the latest buyout is likely to consolidate the company’s stand as a provider of high-quality care in the United States and Europe.
Stryker’s MedSurg & Neurotechnology in Focus
Stryker’s MedSurg products mainly comprise surgical equipment and surgical navigation systems. The Neurotechnology & Spine division includes neurosurgical and neurovascular devices.
Recently, Stryker completed the acquisition of Entellus Medical, reported within the Neurotechnology & Spine segment. Notably, the buyout is expected to be accretive to the company’s earnings in 2018.
Stryker has also been gaining consistently from the MedSurg unit. In the last reported quarter, the segment posted significant contributions from the earlier acquired NOVADAQ.
Market Prospects
A research by MarketsandMarkets reveals that the global smoke evacuation system market is expected to reach $180 Million by 2020, at a CAGR of 5.6%.
The rising demand for minimally invasive surgeries and a growing grey population are driving growth in the market.
Price Performance
Stryker’s shares have rallied 21.8% compared with the industry’s rise of 11.1% in a year’s time.
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Zacks Rank & Other Key Picks
Stryker carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are, Genomic Health GHDX, Abiomed ABMD and Integer Holdings Corporation ITGR.
Genomic Health has an expected earnings growth rate of 187.5% for the current quarter. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Abiomed has a projected long-term earnings growth rate of 27%. The stock flaunts a Zacks Rank #1.
Integer Holdings has a projected long-term earnings growth rate of 15%. The stock carries a Zacks Rank #2.
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