Orthovita, Inc. (VITA)

[surf1944]

Stryker will buy competitor Orthovita for $304M
Stryker buying bone graft material maker Orthovita for about $304M in cash

On Monday May 16, 2011, 9:08 am

NEW YORK (AP) -- Orthopedic implant and surgical products maker Stryker Corp. said Monday it will buy rival Orthovita Inc. for about $304 million in cash.

Orthovita's products include Vitoss bone graft and Cortoss bone augmentation material. It also sells Vitagel, which is designed to reduce bleeding.

Stryker is offering $3.85 per share, a premium of 41 percent from Orthovita's closing price Friday. It will also assume $12 million in debt held by Orthovita.

Shares of Orthovita jumped $1.09, or 39.9 percent, to $3.82 in pre-market trading. The stock has have traded between $1.60 and $3.54 in the last year.

Stryker, of Kalamazoo, Mich., reported $7.32 billion in revenue in 2010. Orthovita, based in Malvern, Pa., had $95 million in revenue.

The boards of both companies have approved the deal, which also requires approval from the holders of at least half of Orthovita's shares as well as clearance from antitrust regulators. The companies said the holders of 14.5 percent of Orthovita shares have already committed to the deal.

Stryker will start an offer for Orthovita shares within 10 days, and it expects the deal to close during the second quarter.