Stryker issues $3 billion in new debt for Inari acquisition

Today, Stryker Corporation (NYSE:SYK), a leading medical technologies firm with a market capitalization of $149.5 billion, announced the completion of a substantial debt offering, raising a total of $3 billion. According to InvestingPro data, the company operates with a moderate level of debt and maintains a GREAT financial health score, suggesting strong capacity for this new offering. The offering, finalized on Monday, consists of four series of notes with varying maturity dates ranging from 2027 to 2035, bearing interest rates from 4.550% to 5.200%.

This financial move comes as part of Stryker’s strategy to fund its upcoming acquisition of Inari Medical (TASE:PMCN), Inc., a move that is contingent upon the satisfaction of certain conditions by July 7, 2025, or potentially extended to October 6, 2025. The company has demonstrated strong financial performance, with revenue growth of 10.23% in the last twelve months and maintaining dividend payments for 35 consecutive years. Should the acquisition not proceed by the specified date, or if the merger agreement is terminated beforehand, Stryker is obligated to redeem the 2030 and 2035 notes at a premium.

The notes were issued under an existing shelf registration statement and sold through an underwriting agreement with major financial institutions including Citigroup (NYSE:C) Global Markets Inc. and Barclays (LON:BARC) Capital Inc. The offering was made pursuant to a prospectus supplement dated January 30, 2025.

Stryker’s indenture agreement with U.S. Bank Trust Company, National Association, as trustee, includes provisions that restrict the company’s ability to incur certain liens and engage in specific transactions. Moreover, in the event of a change of control followed by a downgrade of the notes’ credit rating, Stryker must offer to repurchase the notes at a premium.

The proceeds from the 2030 and 2035 notes, alongside other available funds, are earmarked for the tender offer related to the Inari acquisition and the associated costs. The proceeds from the 2027 and 2028 notes are intended for general corporate purposes, which may include repaying, redeeming, or retiring other debts.

This strategic financial maneuver is set to position Stryker for its anticipated expansion through the acquisition of Inari, reflecting the company’s proactive approach to managing its capital structure and investment opportunities. Currently trading near its 52-week high of $406.19, InvestingPro analysis indicates the stock is trading above its Fair Value. Investors seeking deeper insights into Stryker’s financials and growth prospects can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 13 additional ProTips and extensive financial metrics.

In other recent news, Stryker Corporation, a prominent name in the medical technology industry, has had several major developments. The company announced the upcoming retirement of board member Allan Golston, a change that will take effect at the annual shareholders meeting scheduled for May 2025. Stryker also revealed an increase in its quarterly dividend to $0.84 per share, up 5% from the previous year, reflecting its financial health and commitment to shareholder returns.

In the realm of financial analysis, Stryker’s stock has seen a series of price target adjustments. Truist Securities raised its price target for the company to $413, albeit maintaining a Hold rating due to perceived lagging profitability growth. Stifel, on the other hand, increased the price target to $440, maintaining a Buy rating after Stryker’s strong Q4 performance. RBC Capital Markets also raised its price target for Stryker to $435, retaining an Outperform rating due to the company’s robust 2025 guidance.

These recent developments reflect a dynamic period for Stryker, with changes in board composition, financial performance, and market analysis. As always, investors are advised to monitor these developments closely.

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