Stryker Corporation (NYSE:SYK), a leader in medical technology, has announced the successful completion of a public offering of Euro and U.S. Dollar-denominated notes, according to a recent 8-K filing with the Securities and Exchange Commission.
The offering, which took place today, involved the issuance of €800 million in 3.375% notes due 2032 and €600 million in 3.625% notes due 2036, collectively known as the "Euro Notes".
The Euro Notes were issued under an agreement with several underwriters led by Citigroup Global Markets Limited and Goldman Sachs & Co (NYSE:GS). LLC. The company expects to receive net proceeds of approximately €1.383 billion (or $1.529 billion based on the exchange rate on August 30, 2024), after accounting for underwriting discounts and estimated offering expenses.
Concurrently, Stryker also completed a U.S. Dollar offering ("USD Offering") of $750 million in 4.250% notes due 2029 and another $750 million in 4.625% notes due 2034, referred to as the "USD Notes".
The USD Offering was also executed with a group of underwriters including Citigroup Global Markets Inc. and Morgan Stanley & Co (NYSE:MS). LLC. The net proceeds from the USD Offering are expected to be around $1.482 billion after deductions.
The indentures governing the offerings contain covenants limiting the company's ability to secure indebtedness with certain liens, engage in sale and leaseback transactions, and consolidate or merge with other entities. In certain conditions, such as a change of control and credit rating downgrade, Stryker may be required to offer to repurchase the notes at a premium.
Stryker intends to use the net proceeds from both offerings to repay existing debts, including €500 million of floating rate notes and €850 million of 0.25% notes both due in 2024, and for general corporate purposes which may encompass working capital, potential acquisitions, and other business opportunities.
In other recent news, Stryker Corporation has unveiled two new products in its Foot & Ankle lineup, the Osteotomy Truss System (OTS) and Ankle Truss System (ATS), and announced plans to acquire Vertos Medical Inc. and care.ai.
The OTS and ATS, expected to enhance orthopedic solutions, were introduced at the American Orthopaedic Foot & Ankle Society Annual Meeting. The acquisitions aim to expand Stryker's healthcare IT and connected devices portfolio.
The company has also reported a 9% organic sales growth and a 10.6% increase in adjusted earnings per share in the second quarter of 2024, with a full-year organic sales growth projection between 9% and 10%, and an adjusted EPS ranging from $11.90 to $12.10.
Analysts at Piper Sandler and BTIG have maintained their Overweight and Buy ratings on Stryker, respectively, citing the company's diversified product range and strategic approach to mergers and acquisitions.
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