What happened
One of the top-gaining stocks on Tuesday was that of beleaguered healthcare company Sotera Health (SHC 3.31%). After it announced that a massive legal cloud hanging over it had drifted away, the company's shares almost doubled in price, closing just under 100% higher on the day.
So what
Sotera announced Tuesday morning that it and its subsidiaries have reached a settlement to settle a raft of lawsuits in county and federal courts in Illinois. The cases stem from the conduct of company subsidiary Sterigenics, which was accused of being responsible for harmful ethylene oxide emissions from a factory located in the state.
The terms of the settlement stipulate that Sterigenics is to pay $408 million to "substantially all" of the plaintiffs. It added that the numerous settlement agreements will be completed in 90 to 120 days. As part of the arrangement, Sotera/Sterigenics is not admitting any liability, or that the emissions were a health hazard to the community around the factory.
In its press release on the settlement, Sotera wrote that it provides "a pathway to comprehensively resolve the claims pending against Sterigenics and Sotera Health LLC in Illinois and thereby enable the Company to focus its full attention on operating the business, serving our customers and delivering on our mission of Safeguarding Global Health."
Now what
The tangled legal mess engendered by the emissions controversy was a massive albatross on the neck of Sotera, so the investor reaction to the settlement was entirely understandable. Now, the specialty healthcare company can turn its attention back to its core competency, providing a full slate of sterilization and lab-testing solutions for its peers in the industry.
