What happened
Vocera Communications (VCRA), a company that specializes in communications systems for the healthcare industry, saw intense investor interest on Thursday. The company's stock rocketed nearly 27% higher on the news that it is effectively being acquired by a much larger peer.
So what
Vocera and medical device maker Stryker (SYK -2.55%) divulged in a joint press release they have signed a definitive merger agreement. Under its terms, Stryker will acquire all outstanding shares of Vocera in a public tender offer for $79.25 per share. All told, the deal's enterprise value is roughly $3.09 billion.
Image source: Getty Images.
Following the announcement, investors traded up Vocera shares to nearly that level, as they closed at $79.17.
The press release stated that: "Vocera's highly developed software competency, unique and innovative hardware solutions, and the ability to securely enable remote communication between patients and their families, complements Stryker's Advanced Digital Healthcare offerings. The combined business will further advance Stryker's focus on preventing adverse events throughout the continuum of care."
The boards of both healthcare companies have approved the transaction, which is anticipated to close before the end of the first quarter. Stryker said it would likely have a neutral impact on its per-share net income in 2022; it did not provide any estimates for future periods.
It also did not specify how it would finance the deal, although this likely won't be problematic. At the end of its most recently reported quarter, it held nearly $2.6 billion in cash on its books.
Now what
Vocera and Stryker are complementary businesses, so if they are combined effectively, the acquirer should benefit commensurately. Meanwhile, existing Vocera investors will enjoy the handsome (if not outrageous) premium being paid for their shares.