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K2M Headquarters

Stryker announced a definitive merger agreement to acquire all of the issued and outstanding shares of common stock of K2M Group Holdings, Inc. for $27.50 per share, or a total equity value of approximately $1.4 billion. K2M, which was founded in 2004, has emerged as a key player in the roughly $10 billion spinal market.

With annual sales approaching $300 million, K2M brings to Stryker’s Spine division a highly complementary and innovative portfolio, which includes a strong position in the complex spine market. Additionally, K2M’s broad portfolio will strengthen Stryker’s Spine offering in the core spinal segment, including an attractive minimally invasive spine portfolio, further Stryker’s capabilities in additive manufacturing, and expand the Company’s global footprint. K2M’s compelling product portfolio and sales force focus have driven a double-digit compounded annual growth rate over the past five years.

The combined business will have a competitive portfolio across Stryker’s Spine product categories and leverage a more powerful commercial engine. With the addition of K2M’s proven product portfolio, consistent track record of execution and robust pipeline, Stryker Spine’s business will be well-positioned to sustain innovation and provide its customers and employees with proven products.

"This acquisition underscores our commitment to the spinal market, which is the largest segment of Orthopaedics with significant unmet needs," stated Kevin A. Lobo, Chairman and Chief Executive Officer, Stryker. "We believe K2M will significantly enhance our presence with surgeons, patients and employees in both the spine and related neurotechnology markets."

"Joining Stryker will be a very exciting next chapter for our global team and surgeon customers around the world," said Eric D. Major, Chairman, Chief Executive Officer, and President of K2M. "Stryker’s established leadership in the orthopedic and neurosurgical market, combined with K2M’s culture of innovation and leadership in complex spine and minimally invasive solutions, represent a powerful opportunity for Stryker to strengthen its leadership in the $10 billion global spine market."

The closing of the transaction is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval of the merger by K2M’s stockholders and other customary closing conditions. Upon closing of the transaction, it is expected that Eric D. Major will serve as President of Stryker’s Spine division and lead the combined business in its continued growth and innovation. Bradley W. Paddock, the current President of Stryker’s Spine division, will assist with transitioning his responsibilities to Mr. Major while also supporting the integration efforts.

Citigroup Global Markets Inc. served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as outside legal counsel for Stryker in connection with this transaction.

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