Dallas, Texas 10/04/2013 (Financialstrend) – On September 25, it was announced that MAKO Surgical Corp. (NASDAQ:MAKO) had agreed to be bought over by Stryker (SYK). The share holders of the medical devises company are likely to be a happy lot since SYK is willing to pay $30 per share of MAKO, which translates to a premium of 86% over its September 24 close of business pricing.
SYK CEO Kevin Lobo was gung ho about the deal and is quoted as saying “Our combined expertise offers the potential to simplify joint reconstruction procedures, reduce variability and enhance the surgeon and patient experience.”
While the jury is still out on the advisability of SYK paying a lofty premium on MAKO, the analysts are all unanimous in their opinion that the acquisition itself made a lot of business and strategic sense. BMO’s Joanne Wuensch is quoted as commenting “SYK takes a step forward into robotic surgery and consolidates its orthopaedic market leader tag”
On October 2, Stryker CEO Kevin Lobo in a interview with Wall Street Journal has reiterated that the 89% premium his company paid for Mako is well worth. “The potential is enormous and it can really provide significant differentiation.” he is quoted to have commented.
At the inflated valuations post the takeover bid, the market cap of MAKO is 41.39 billion. It has posted sales of $112 million with close to $41 million in net loss over the past 12 months trailing period. It has 436 employees and has never declared a dividend. It has total outstanding shares of 46 million common stock.
As of October 3 close of business, the stock was trading at $29.6 per share which is almost close to its 52 week high valuation. The jump in the fortunes of the share holders can be understood when one realizes that the stock has jumped up 196% from its 52 week low valuation.