Stryker: Acquisitions our top priority for cash (MassDevice)
Stryker (NYSE:SYK) told analysts this week that mergers & acquisitions are its top priority for the $2.59 billion in ready cash it’s carrying on its balance sheet, with small or mid-sized deals more likely than a blockbuster like the much-speculated-upon possibility of a merger with rival Smith & Nephew (NYSE:SNN).
During a cocktail hour to kick off its analyst day in Kalamazoo, Mich., the orthopedics giant’s executives said M&A “is the company’s first cash use priority and the company remains actively engaged in seeking out deals,” according to Leerink Partners analyst Richard Newitter. Although CEO Kevin Lobo does “not feel in a rush” to close deals because its businesses are in “solid competitive positions,” Newitter wrote, Stryker is ready to be “opportunistic when the ‘right’ deal presents itself.”
Although both large and small deals are on the table (provided they make strategic sense), Stryker “is going to be very disciplined on price and [return on invested capital] ROIC timelines, and smaller/mid-sized deals are more ‘the norm,'” he wrote. That makes a deal less likely for Britain’s Smith & Nephew...
