Steris (NYSE:STE) announced today that it will acquire Cantel Medical (NYSE:CMD) for $4.6 billion — a major merger in the infection prevention space.
The deal is expected to close by June 30, pending customary closing conditions, regulatory approvals and an OK by Cantel shareholders. News of the merger comes a month and a half after Steris closed on its $850 million purchase of Key Surgical.
The deal will add a full suite of high-level disinfection disposables, capital equipment and services — as well as additional single-use accessories — to Steris’s endoscopy offerings. Cantel’s dental business will also extend Steris into a new segment of potential customers.
“We have long appreciated Cantel, which is a natural complement and extension to Steris’s product and service offerings, global reach and customers,” Steris CEO Walt Rosebrough said in a news release. “Our companies share a similar focus on infection prevention across a range of healthcare customers. Combined, we will offer a broader set of customers a more diversified selection of infection prevention and procedural products and services.”
Cantel Medical CEO George Fotiades described the merger as a “perfect strategic fit.” “This combination is a natural next step for our company, enabling us to accelerate progress on our Cantel 2.0 initiatives and drive enhanced value for shareholders and the healthcare providers and systems we support.”
Steris expects to fund the cash portion of the transaction consideration and repay a significant portion of Cantel’s existing debt with roughly $2 billion of new debt. Steris said it has obtained fully committed bridge financing.
Steris’s products include sterilizers and washers, surgical tables, lights and equipment management systems and connectivity offerings such as operating room integration; disposable products such as detergents and gastrointestinal endoscopy accessories and other products. It also offers services such as equipment installation and maintenance, microbial reduction for medical devices, instrument and scope repair solutions, laboratory services and off-site reprocessing. Cantel meanwhile specializes in endoscope disinfection, water purification and filtration for dialysis, and healthcare disposables.
STE shares were down 3.7% to $192.83 apiece by midday trading today, while CMD shares were up 3.0% to $87.23 apiece. MDO and MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.