SNN

Source of your info?

 

Bump

 

Bump?

 

yes, bump

 

1.stryker"s been looking at overseas office space.
2.it makes sportsmed sense
3. stryker "was" talking about it 6 moonths ago
4. market share
5. S&N ortho president quit today 12-12-2014 after 2 years on the job. maybe he know something?????
6. S&N has been making changes in endo.
7. word is endo could be a sticking point. could be considered a monopoly. might have to sell that off.

 

1. No one cares Abt aports med. no money
2. Pres. would stay if he knew buyout was coming Bc hebwould be in line for a huge payday

 

How would sports med be considered a monopoly? Stryker has no sports med. It's something they've been trying to get into for a while. Rumor is that's what they want. Careful what you wish for. Internallly the co is a mess. Inherit more probs than they want to deal with. Sports med is run by a bunch of know it all who in the end know nothing about the market, their products, selling process, etc. They're only goal is to make themselves look good at others expense

 

http://www.bloomberg.com/news/2014-12-23/stryker-said-to-plan-takeover-bid-for-smith-nephew-soon.html

Well...what is true? We shall see.

 

Announcement next month. Finalized by 3rd qtr

 

Well it looks like your inside info was way off...

 

I would guess the fairly recent legislation drafted against inversions has a lot to do with this. There's little doubt that Stryker originally was planning to do this just for the advantages of the inversion, but now with those gone the deal might not be as beneficial as it looked 6 months ago.
It probably also is worth mentioning that the Federal Government is watching these closely, and it's not like Stryker has a great relationship with them in the last 3-5 years. This would not improve that relationship.

 

SNN could help with their squeaky clean image. I crack myself up.

 

?

 

Sports Med has large profits and high growth. SNN is # 1 or 2 in this area.

Buying Ortho = scale to combat consolidations and provides big cost reduction opportunities.

Wound Care could be a bolt on business. O,if desired, could be spun off as well.

Still making too much sense not to happen.

 

Hey genius, it must be really satisfying to come on CF and flatter yourself. The inversion benefit is gone so the main attraction is off the table. Besides, S&N is a terrible buy at the current stock price. Look for a $10 to $20 drop in their share price when Stryker officially withdraws its interest. Much better buys out there that could strengthen the Stryker bag. Then again, JB would never have made some of the bad deals Stryker has made over the last few years.

 

It's CP big guy. With inversion gone it's definitely less attractive. Depends how much they care about sports med at this point. If they're 100% behind this robot they may decide they don't care about buying another metal company. That said robotic adoption, even in the most optimistic assessment, will take years. Can't really afford to bleed ASP until then.

 

Buying SNN won't prevent continued ASP erosion. Robot seems like a gimmick to me.

 

Inversion wasn't even the biggest draw. With a Euro headquarter in Amsterdam and "buying" products from that site, a lot of inversion has already been completed. Plus, with multiple manufacturing site in Europe (including 2 in Ireland where taxation is super lenient) Syk is already "inverted." SNN effective tax rate is actually higher than Syk's.

It's about the super profitable sports med line and trying to buoy ASP by removing an ortho competitor. Also, if you think SNN is overvalued, did you see the Mako deal? 86% premium over an already overvalued stock. The jury is still out on that clusterfuck..

 

Plus, SNN has a beefy international market share (especially in Europe). I doubt KL will go out on a limb and buy another Mako or a niche product (SBI? That sponge counting company?). I think the board and the shareholders expect a blockbuster that will "fix" Syk's problems ie. international sales, ortho price erosion, reliance on capital sales for growth. SNN is an easy sell even it doesn't end up fixing everything.

 

SNN has some winners that can easily be integrated into SYK (Visionaire, the knee franchise), has great registry data on hips, has market share in Europe, and has procedure specific products for Endo. SYK divests wound care and trauma except frames, and voila! SYK is stronger, SNN is absorbed, and SYK has more bargaining power to fight the profit plunge. Zimmer and JNJ are ready to hold the line on pricing; by getting rid of a competitor, the big three can start to get margins back to a more respectable rate.