Cantel has a market value of around $3.5 billion. Photo: Michael Nagle/Bloomberg News By Cara Lombardo Close Cara Lombardo Update
The mostly stock deal values Cantel at around $3.6 billion, or $84.66 a share, based on Steris’ closing price Monday, the companies said. Cantel shareholders would get about $16.93 in cash and 0.33787 of a Steris share for each Cantel share they own.
The Wall Street Journal first reported the companies were near a deal Monday.
Cantel had a market value of around $3.5 billion as of Monday’s close, while Steris’ was around $17.3 billion.
Dublin-based Steris, which has a U.S. presence in Mentor, Ohio, sells sterilization equipment, surgical tables, and other products and services used in hospitals and laboratories.
Little Falls, N.J.-based Cantel is similarly focused on sterilization, making items including disposable products used in endoscopy procedures, towels and bibs used in dental offices, and surgical masks.
A combination would offer cost-cutting opportunities and expand Steris’s reach into the dental market. Both companies have done deals of their own in recent years: Steris paid $850 million to buy Key Surgical late last year, and Cantel paid $775 million to buy dental-equipment maker Hu-Friedy Manufacturing in 2019.
The coronavirus pandemic has been a mixed bag for the companies’ businesses. On the one hand, health-care providers and their suppliers have been hurt by a decrease in elective medical procedures as patients avoid unnecessary hospital visits. On the other, demand for certain supplies and protective equipment has been jumping as the population tries to beat back the pandemic.
When reporting its quarterly earnings in December, Cantel said its sales were hurt by the reduction in medical procedures but that revenue per procedure had increased because of higher sales of personal protective equipment. Cantel’s chief executive, George Fotiades, said the company expects the volume of medical procedures to fully recover as more people receive the Covid-19 vaccination.
Steris CEO Walter Rosebrough said on its quarterly earnings call in November that the company’s life-sciences unit had a jump in revenue, partly because of customers buying supplies in anticipation of Covid-19 vaccine production. The company’s health-care segment was hurt by a decline in medical procedures, while its sterilization unit benefited from increased demand triggered by the pandemic.
Steris is set to present Wednesday at JPMorgan Chase & Co.’s annual health care conference.
Write to Cara Lombardo at [email protected]
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 12, 2021, print edition as ‘Medical Supply Deal Is In Works.’