Suppliers of Medical Equipment in Talks to Merge
Steris, Cantel Medical discussing a mostly stock deal, according to people familiar with the matter
Steris PLC is in talks to combine with Cantel Medical Corp. , according to people familiar with the matter, in a deal that would bring together two big providers of sterilization products.
The companies are discussing a mostly stock deal that could be completed as soon as Tuesday, assuming talks don’t fall apart, the people said.
Cantel has a market value of around $3.5 billion, while Steris’s is 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’s chief executive, 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, which is often a forum for deal announcements.