Inari Medical Inc., one of Orange Countyโs fastest-growing medical device makers, is being acquired for $4.9 billion by global medical technology company Stryker Corp.
Stryker on Jan. 6 announced an agreement to acquire the Irvine-based company for $80 per each share, kicking off the new year with the largest medtech acquisition in Orange County in recent years.
Wall Street reacted positively to the news, sending Inariโs shares up this week by 59% to $79.30, indicating that investors believe the deal will happen (Nasdaq: NARI).
Inariโs portfolio of medical devices and accessories to treat venous thromboembolism (VTE), or blood clots in the veins, was highly attractive to Stryker, according to Inari Chief Executive Drew Hykes. VTE affects more than 900,000 patients yearly.
โStryker recognizes the power of Inariโs portfolio of products and the growth opportunity ahead for our business, both in the United States and internationally,โ Hykes wrote in an email to employees on Jan. 6.
โFor Stryker, which does not have any presence in VTE, Inari provides an opportunity to grow into a brand-new business that is large and highly underpenetrated.โ
The acquisition ends the independence of a fast-growing company that was founded in 2011 and got its first product approved in 2017. Analysts have estimated sales climbed 22% last year to $603 million and will increase another 18% this year to $712 million.
Inari became nationally known among doctors as the best method to remove clots from veins. A key advantage was that Inari designed the product specifically for the veins while competitors tried to use adapt devices designed for arteries for use in the veins.
โThe acquisition of Inari expands Strykerโs portfolio to provide life-saving solutions to patients who suffer from peripheral vascular diseases,โ Stryker CEO Kevin Lobo said in a statement. โThese innovations elevate the standard of care for venous thromboembolism patients and will accelerate Strykerโs impact in endovascular procedures.โ
Sales this year at Portage, Michigan-based Stryker are expected to rise 8.4% to $24.4 billion. Stryker, which has a $139 billion market cap, said it will provide more information about the acquisition during the companyโs fourth quarter earnings call scheduled for Jan. 28 (NYSE: SYK).
The acquisition is expected to close in the current quarter. Until then, Inari and Stryker โwill remain two separate companies,โ Hykes said.
Given the โhighly complementaryโ nature of Inariโs portfolio, regulatory approvals should be expeditious, Deutsche Bank analysts told investors.
No Plans to Change Irvine HQ
There are currently no plans to โalterโ Inariโs headquarters or other facilities, according to a document of frequently asked questions made for employees.
Inari recently inked a lease for 54,400 square feet at 510 Technology, according to CoStar.
510 Technology is less than a mile from Inariโs headquarters at 6001 Oak Canyon, a roughly 130,000-square-foot facility in the Spectrum area of Irvine, also owned by Irvine Company.
Last year, Inari subleased a smaller amount of space of 27,000 square feet at the same building from fellow medical device maker Vyaire Medical Inc.
The company also plans to open operations in Grecia, Costa Rica and is investing a minimum of $15 million on a 70,000-square-foot manufacturing facility located at the cityโs Evolution Free Zone.
Inari expects to initially hire 300, and ultimately 600 people, at the new location, which is scheduled to open sometime this year.
As for leadership changes, the time between now and when the deal closes will be used to identify a new leadership team, according to Inari.
โAs we look to the future, we believe it is the right time to join forces with a partner that can help us build on our momentum and advance our mission,โ Hykes said.
Inari last October was featured in the Business Journalโs issue of fastest-growing public companies, ranking as the third fastest-growing large public company with revenue having increased 63% over a two-year period to $547.5 million.
Inari is currently the 10th largest medical device company in Orange County with 678 employees as of last April.
Employees that own any of Inariโs stock will have their shares converted to $80 per share in cash upon the close of the transaction.
Busy MedTech Year in OC
It was a busy year for medtech companies in Orange County in 2024.
The region saw the completion of two major, multibillion medtech deals toward the end of last year.
The acquisition of Irvine-based Edwards Lifesciences Corp.โs (NYSE: EW) Critical Care unit by Becton, Dickinson and Co. (NYSE: BDX) for $4.2 billion, the largest of the two, closed last September.
The new unit, renamed BD Advanced Patient Monitoring, is being led by Katie Szyman, who oversees about 4,000 global employees and 500 local employees at the former Alteryx Inc. headquarters in Irvine.
Edwards chose to sell the unit rather than spin it off as it had originally planned in part to create more career opportunities by joining Becton, which by comparison has 75,000 global employees.
โIt just made a lot of sense to instead of going in two steps, to just go in one step and really go somewhere where there was such a great culture and greater opportunity to help more patients,โ Szyman previously told the Business Journal.
The second deal was the sale of Axonics, a medtech company that makes products to treat incontinence, to Boston Scientific Corp. (NYSE: BSX) for $3.7 billion.
Axonics is now a wholly owned subsidiary of Boston Scientific under its urology division and is led by General Manger Kristin LaRocca.
Co-founder Raymond Cohen retired as CEO of the company after the acquisition closed last November. On Jan. 6, Cohen was appointed a venture partner at Sherpa Healthcare Partners, a VC firm focused on early and growth stage healthcare companies primarily inย Asiaย andย the United States,
โHaving worked with Ray as one of the earliest investors of Axonics, we are enthusiastic to have him join the team,โ Sherpa Managing Parter Darren Cai said in a statement.
โSince our inception, Sherpa has been committed to investing in innovative technologies and therapies that improve human health, and Rayโs extensive experience and proven track record in growing medtech companies will be highly accretive to our existing investment activities.โ
Outside of M&A activity, massive upheavals took place at Irvine-based medical device maker Masimo Corp. (Nasdaq: MASI).
The company lost a long-running proxy battle with Politan Capital Management, resulting in the ousting of founder Joe Kiani from the board and his resignation as CEO not long after.
A retrial also began last November for a trade secret case between Masimo and Apple Inc. regarding pulse oximetry technology. Closing arguments are expected to take place this month.
Itโs no surprise that these companies made headlines with medtech considered to be one of OCโs most vital industries.
The life science industry employed over 60,000 workers in OC and generated $7.5 billion in labor outcome and output of $45 billion, according to Biocom Californiaโs Life Science Economic Impact Report.
They report that medical devices and equipment were the largest sub-sector of life science employment, accounting for 42%.