Stryker stock dipped Thursday on its $3.09 billion plan to acquire health care software company Vocera Communications (VCRA). But Vocera stock ripped higher.
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Vocera makes tools to help health workers, caregivers and medical devices communicate. This helps drive efficiencies and improve safety in health care, Stryker (SYK) said in a news release. Stryker plans to add Vocera to its advanced digital health care unit.
“This acquisition underscores our commitment and focus on the customer,” Chief Executive Kevin Lobo said in a written statement. “Vocera will help Stryker significantly accelerate our digital aspirations to improve the lives of caregivers and patients.”
On today’s stock market, Stryker stock ticked down 0.3% to 271.50. Vocera stock, on the other hand, rocketed 26.6% to close at 79.17. The early move put shares within striking distance of the buyout price tag at 79.25 per share of Vocera stock.
Stryker Stock: ‘A Natural Fit’
BTIG analyst Ryan Zimmerman called the transaction “a natural fit.” Vocera supports smartphone and wearable devices, software, alarm management and other products, he said in a report to clients.
“Stryker is expanding beyond its ‘core’ medtech focus with the acquisition, but the Vocera acquisition is a natural fit in our view,” he said. “It complements Stryker’s digital health care offerings and further engenders Stryker as a leader in patient safety tools that are used commonly throughout health care.”
He has a buy rating and 280 price target on Stryker stock. Vocera stock, covered by BTIG analyst David Larsen, has a buy rating and 70 price target.
The deal is expected to close this quarter and won’t have an impact on net earnings, Stryker said. Both companies’ boards have already approved the transaction.
Zimmerman noted Stryker is paying a roughly 29% premium for Vocera stock. The company hasn’t said how it will fund the Vocera deal. Recently, though, Stryker said it was nine months ahead on paying down debt from the Wright Medical Group deal, which closed in November 2020.
Stryker stock is currently consolidating with a buy point at 281.26, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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