Stryker to Acquire China Orthopedics Manufacturer

Kalamazoo, Mich.-based Stryker Corporation is going where other large medical device companies such as Medtronic have gone before. The company will now have a division in China following a recent deal to acquire Trauson Holdings Company Ltd. The Jiangsu-based company manufactures orthopedic products. Last year, Medtronic purchased two major medical product manufacturers in China: Orthopedic product manufacturer Kanghui and cardiovascular product manufacturer LifeTech Scientific Corporation.

Stryker’s deal is valued at $764 million, which Stryker will pay in cash, or $0.97 per share. Since the acquisition announcement, Trauson’s shares have skyrocketed from $0.27 to $0.94. Trauson’s controlling shareholder, Luna Group, has undertaken to accept Stryker’s offer by tendering 61.7 percent of the Trauson shares toward the offer. Trauson had $60 million in sales revenue in 2011. According to Stryker, this makes Trauson the leading trauma manufacturer in China and a major competitor in the spine segment. Stryker and Trauson have maintained a relationship under an OEM agreement for instrumentation sets since 2007. With this acquisition, Stryker will expand its presence in a key emerging market with a product portfolio and pipeline that is targeted at the large and fast growing value segment of the Chinese orthopedic market.

“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 A. 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. With its research and development expertise, manufacturing capabilities and strength of its distribution network, Trauson is a compelling opportunity for Stryker to drive growth in China and other emerging markets for years to come.”

“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’s main business is orthopedics, particularly spine and neurotechnology. The company provides medical devices in a range of segments.