Stryker's stock hit a 52-week high earlier this week as company anticipates another opportunity to acquire Smith & Nephew over the next few weeks, according to a Digital Journal report.
Stryker stock hit $91.55 on Nov. 24 as their "wait" period under the United Kingdom takeover rules comes to an end. The company said in May it wouldn't pursue Smith & Nephew for six months. Now that period ends on Nov. 28.
Stryker stock closed at $91.40 on Nov. 24, which represents a year-to-date return of 21.6 percent. Stryker had a positive average earnings at 0.9 percent and Zacks rates the stock at a "three" — or "hold." Stryker has a stock market cap of $34 billion and expects long term earnings growth rate of 8.6 percent.
Mergers and acquisitions have been a huge strategy in the orthopedics device market, building tech company giants. Medtronic is in the process of acquiring Covidien and Zimmer is acquiring Biomet, moves that propel both companies into the orthopedic device company stratosphere; they join medtech giant Johnson & Johnson subsidiary DePuy Synthes.
Stryker has made several smaller acquisitions over the past two years, including MAKO Surgical, Small Bone Innovations and Berchtold. But acquiring Smith & Nephew could be the engine that propels Stryker to the next level. There are a few potential roadblocks, even if both companies agree to beneficial terms. The acquisition would face tough scrutiny under anti-trust laws, and since Smith & Nephew is based in London, Stryker would have challenges relocating headquarters overseas in a tax-inversion strategy. The federal government has recently made moving headquarters overseas a more difficult move.
Additionally, Smith & Nephew CEO Olivier Bohoun has maintained in public comments that the company is not looking for a suitor and is content, at least for the moment, to remain independent.