Novadaq Technologies (NVDQ) Stock Soars 95% on Stryker Acquisition Deal

On Monday, NOVADAQ Technologies Inc. NVDQ announced that Stryker Corporation SYK has agreed to acquire the company for $11.75 per share in cash, putting NOVADAQ's total worth at $701 million. NOVADAQ stock opened more than 95% higher on Monday morning.

"This transformative transaction recognizes the exceptional value we have built at NOVADAQ. Moreover, we believe it creates a strong opportunity for NOVADAQ, its customers, partners, shareholders, and employees," said NOVADAQ CEO Rick Mangat.

"This acquisition aligns with our focus on enabling our customers to see and do more by enhancing cross-specialty surgical visualization," said Timothy J. Scannell, Stryker's Group president.

Stryker manufactures medical devices and equipment, while NOVADAQ develops fluorescence imaging technology which allows surgeons to see blood flow in vessels.

"NOVADAQ's unique, innovative technology complements our advanced imaging portfolio and expands our product offerings into open and plastic reconstructive surgery. Their innovative technology can reduce post-procedure complication rates and the cost of care for a broad variety of surgical treatments," Scannell said.

While the $701 million valuation is 8.4 times NOVADAQ's latest 12-month revenue, analysts believe the purchase is a smart move for Stryker. "We believe adding NVDQ's IP to Stryker will allow [it] to better grow the fluorescence field and we feel SYK is the most equipped company to do so," wrote Sean Lavin, an analyst from BTIG, in a research note Monday.

The transaction must first be approved by a majority of NOVADAQ's shareholders. Stockholders of at least 66% of NOVADAQ's total stock must agree to the deal either in person or be represented by a proxy. A special meeting is expected to take place around August 4, 2017.

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