Stryker to Spin Off Spinal Implant Business, Reports Strong 2024 Financial Growth

Stryker, a leading medical technology company, has announced plans to divest its spinal implant business, starting with the spin-off of its U.S. operations. This strategic move comes as the company reports significant financial growth for 2024 and continues its acquisition spree in the medical device sector.

Spine Business Spin-Off and VB Spine Launch

Stryker has reached an agreement with investment firm Viscogliosi Brothers to sell its U.S. spine implant operations. The new independent venture, to be named VB Spine, will maintain a strategic partnership with Stryker, including exclusive access to the company's recently launched Mako Spine robotics and Copilot guidance software.

Marc, John, and Anthony Viscogliosi, co-founders of Viscogliosi Brothers, expressed their enthusiasm for the acquisition, stating, "We have long admired Stryker for its comprehensive spine portfolio, incredible talent, and strong culture. We see a tremendous opportunity to provide the focus, surgeon-centric innovation, and commercial execution needed to grow the business and further impact patient lives and outcomes."

The deal also includes a binding offer to acquire Stryker's spine implants business in France, with plans to expand to other international markets pending legal and regulatory requirements. The U.S. portion of the transaction is expected to close in the first half of 2025.

Kevin A. Lobo, Chair and Chief Executive Officer at Stryker, commented on the spin-off, saying, "We believe that the spinal implants business, with its comprehensive portfolio and strong sales channel, will thrive as an independent company. With dedicated resources and a focused strategy, the business will be well positioned to succeed as part of Viscogliosi Brothers."

Strong Financial Performance and Acquisition Strategy

Stryker's 2024 financial results demonstrate robust growth across its divisions. The company reported a 10.2% increase in net sales, reaching $22.6 billion for the year. Fourth-quarter revenues showed similar strength, with a 10.7% gain totaling $6.4 billion.

The company's medical surgical and neurotechnology segment saw an 11.1% increase in net sales, reaching $13.5 billion, while the orthopedics division grew by 8.9% to $9.1 billion.

Stryker's growth strategy has been bolstered by several strategic acquisitions in 2024, including:

• Nico Corporation, a brain surgery device manufacturer
• care.ai, a smart hospital software developer
• Molli Surgical, specializing in breast surgery markers

Most recently, Stryker announced a $4.9 billion purchase of Inari Medical, known for its blood-clot-busting devices, further expanding its portfolio in the vascular intervention space.

Leadership Changes and Future Outlook

In addition to the business restructuring and financial growth, Stryker announced a key leadership change. Glenn Boehnlein, the company's chief financial officer, will retire after 22 years of service. Preston Wells, currently serving as CFO for Stryker's orthopedics group, is set to assume the role on April 1, 2025.

As Stryker continues to reshape its business through strategic divestitures and acquisitions, the company appears well-positioned to maintain its strong market presence in the medical technology sector. The spin-off of its spine business and the focus on high-growth areas suggest a clear vision for future expansion and innovation in the industry.