Stryker hopes to clean up with TSO3 buy

Serial acquirer Stryker’s latest deal is, at just $51.7m, not the biggest of recent times. But it is an interesting choice as the medtech industry grapples with the ongoing issue of sterilising reuseable devices such as endoscopes. TSO3 makes sterilisation products that can be used with surgical tools and medical devices that are unsuitable for sterilisation by heating. Instead its main device, the Sterizone VP4, uses ethylene oxide gas to kill the microbes that can contaminate hospital products. Inadequate sterilisation of devices has been linked with infections and even deaths in recent years, with the FDA ordering the duodenoscope manufacturers Olympus, Fujifilm and Pentax to conduct postmarket surveillance studies of how their devices are cleaned in real-world settings.This situation was complicated by the US Environmental Protection Agency closing a sterilisation facility run by Sterigenics in February, owing to increased ethylene oxide emissions. The plant was used by medtechs including Medtronic and Teleflex, which were forced to warn of product shortages as a result of the closure. The earliest the plant could reopen is September. Hospitals might well see the appeal of an in-house machine that means they can limit their outsourcing of device reprocessing.

Stryker's acquisitions, 2018 and 2019 to date
Announcement date Target Value ($m) Focus
Aug 29, 2018 K2M 1,400 Healthcare IT; orthopaedics
Sep 10, 2018 Invuity 228 Endoscopy; general & plastic surgery
Oct 1, 2018 Hyperbranch Medical Technology 220 General & plastic surgery; neurology; ophthalmics
Mar 14, 2019 Orthospace 220 Orthopaedics
Aug 12, 2019 TSO3 52 General hospital and healthcare supply
Jun 25, 2018 Safeair Undisclosed General & plastic surgery
May 1, 2018 Hygia Health Services Undisclosed Cardiology; patient monitoring
Feb 25, 2019 Arrinex Undisclosed Ear, nose, and throat
Source: EvaluateMedTech.

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