Synovis to be acquired for $325M
Baxter International Inc. said it is buying Synovis Life Technologies Inc., a medical device company in St. Paul, for $325 million. The deal is expected to close early next year.
Baxter is a global maker of blood products and intravenous drugs based in Deerfield, Ill. Synovis makes surgical devices, including implantable biomaterial for soft tissue repair, its signature business.
Synovis shareholders will get $28 a share in the deal, Baxter said, a high 52 percent premium over Monday’s closing price of $18.44. After adjusting for the net cash Synovis has, the deal is valued at about $260 million, the company said.
Synovis stock soared 51 percent to $27.82 a share on Tuesday morning, following the news of the acquisition.
“The medical device business that Synovis has built, and its technical capabilities to develop and manufacture surgical products, is highly complementary to Baxter’s existing offering of BioSurgery products,” Ludwig Hantson, president of Baxter’s BioScience business said in a statement. “The combined business will offer surgeons in the United States and around the world a more complete line of innovative tools used to treat patients.”
A Baxter spokeswoman said that it’s reviewing how best to integrate the operations following the deal’s close.
“We’re not anticipating any immediate changes,” she said. Kramp will stay on as CEO “for the time-being” but that there will be joint leadership.
Last year, Synovis employed 310 people in full-time and part-time jobs.
Synovis will be part of Baxter’s regenerative medicine business, a unit that had sales of $527 million last year.
Analysts said they believe Baxter is offering a good value for Synovis.
“It’s a good premium,” said Matt Dolan, senior research analyst with Roth Capital Partners. “We recently viewed the company as undervalued.”
The sale caps a remarkable run for Synovis, which has reported 15 straight quarters of double-digit sales growth. Last year, it had sales of $68.5 million.
Richard Kramp, Synovis’ president and CEO, said in the release that he was enthusiastic about the sale “because the combination of Baxter’s and Synovis’ product portfolios will greatly expand the combined entity’s presence in the exciting and expanding soft tissue repair market, benefiting patients worldwide.”
Staff writer Wendy Lee contributed to this report.
Jennifer Bjorhus • 612-673-4683