In one of the biggest acquisitions in South Florida's bio-medical industry, Stryker Corp. announced Wednesday it will buy Davie-based startup Mako Surgical Corp. in a $1.65 billion deal.
Mako has yet to turn a profit.
The purchase shines a positive light on South Florida's growing bio-medical industry, increasingly active in startups and mergers, said David Coddington, vice president for the Greater Fort Lauderdale Alliance, Broward's economic development group.
Among other recent deals in Broward: Japan's Nipro Corp. bought Fort Lauderdale's Home Diagnostics, a maker of diabetes testing equipment, for $215 million in 2010. The company, now called Nipro Diagnostics, has since invested more than $100 million and expanded to 400 jobs in the county.
Michigan-based powerhouse Stryker will pay an 86 percent premium over Mako's Tuesday stock price to buy Mako's technology and expand in the growing field of robotic-assisted surgery.
Mako makes robotic systems used in hip and knee replacement. It employs more than 400 people, most at its factory at 2555 Davie Road.
Among other products, Mako makes implants that can be inserted using Mako's systems.
Mako shareholders still must approve the deal.
Started in the 1940s, Stryker recently has been buying up medical device makers to bulk up. It reported $8.65 billion in revenue last year and $1.29 billion in net profit.
Mako Surgical launched in 2004, went public in 2008 and still posted losses. It reported $102.7 million in sales and $32.5 million in net losses last year. Losses were $20 million in the first half of this year.
Stryker said the two companies will continue to operate separately until the deal is closed. It offered no further details on what the purchase might mean for Mako employees, management or facilities.
Analysts said the Mako purchase can give Stryker a competitive advantage over rival makers of orthopedic implants and may trigger a wave of takeovers in medical tech companies, Reuters reported.
"The take-out price seems high, but strategically it makes a lot of sense," BMO Capital Markets analyst Joanne Wuensch wrote.
Mako shares closed up 82 percent at $29.46 Wednesday, close to the offer price of $30 per share.
Shares in Stryker, which has had several recalls for hip implants, fell marginally to $66.99 Wednesday.
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