Shares of Cantel Medical (CMD) - Get Report jumped on Tuesday after agreeing to be bought by Steris (STE) - Get Report in a deal valued at $4.66 billion that combines two of the larger providers of infection prevention products.
Cantel shares gained on Tuesday after the companies revealed the deal, which will see Steris acquire Cantel in a cash-and-stock transaction valued at $84.66 a share.
Cantel stock initially rose nearly 10% after the Wall Street Journal first reported the pending deal. The shares were up 3.63% at $87.73 in regular trading on Tuesday. Shares of Steris were down 0.48% at $199.21 in New York.
A combined company will offer cost-cutting opportunities and expand Steris' reach into the dental market. It will also help both companies navigate the pandemic, which has been both a bane and boon for medical equipment and related service providers makers as demand for equipment used in elective medical procedures has been offset by demand for PPE and other protective gear.
“Combined, we will offer a broader set of customers a more diversified selection of infection prevention and procedural products and services,” Steris CEO Walt Rosebrough said in a statement.
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.
Cantel has a market value of around $3.5 billion, while Steris' is around $17.3 billion.
Steris is set to present Wednesday at JPMorgan Chase & Co.'s annual health care conference, which is often a forum for deal announcements.
Reports of a potential tie-up follow two major healthcare deal announced in the first week of 2021.
UnitedHealth Group (UNH) - Get Report last week said it would buy Change Healthcare (CHNG) - Get Report in a deal that values the health technology company at more than $13 billion. That followed Centene's (CNC) - Get Report announcement that it would buy Magellan Health (MGLN) - Get Report in a $2.2 billion tie-up.