Stryker to Acquire Entellus

On Thursday, December 7th Stryker Corp (SYK) announced that they would acquire Entellus Medical (ENTL) for $662 million. Stryker is paying a significant premium of roughly 50 percent to where Entellus closed on Wednesday and approximately a 7.1x estimated 2017 revenues. According to Stryker, the deal will be dilutive to 2018 adjusted net earnings by approximately 4 cents per share.

Entellus markets a balloon sinus dilation system called XprESS for the treatment of chronic and recurrent sinusitis. The procedure can be performed in the office as well as in a hospital setting. They also market the MiniFESS line of surgical instruments for use in general sinus surgeries. In July, Entellus announced an acquisition of their own – a $25 million deal to buy Spirox, which makes an absorbable nasal implant that can be implanted using MIS techniques to treat nasal airway obstruction.

The acquisition highlights Stryker’s increasing strategic focus on the ENT market, which we at InnovaHealth Partners estimate is a $16 billion market growing around 5 percent per annum.