Stryker buy of Vocera to aid confluence of communication, devices

The $3B acquisition may result in more integration and bring more efficiencies for care teams and better experiences for patients and families.

Stryker Corp. continues its years-long effort to diversify in healthcare, making a big move into the technology space by announcing a plan to buy Vocera Communications last week for slightly more than $3 billion.

With this latest purchase, Kalamazoo, Mich.-based Stryker, which had its start in hospital bed manufacturing, is moving into a new arena, tapping into Vocera’s line of healthcare communication technology.

The combination of the two companies presages increased integration between medical devices and communication capabilities, both with clinicians providing care at the bedside, but also with patients and families, in an effort to improve experiences for all involved.

Vocera agreed to be acquired for $79.25 per share. That equates to total equity value of $2.97 billion, and conversion of other forms of Vocera equity will result in a total acquisition cost of nearly $3.1 billion.

The acquisition is expected to close in the first three months of this year and will have a negligible impact on earnings per share this fiscal year.

In announcing the deal, Stryker executives said that Vocera “brings a highly complementary and innovative portfolio to Stryker’s medical division that will address the increasing need for hospitals to connect caregivers and disparate data-generating devices, which will help drive efficiencies and improve safety and outcomes.”

Stryker, like other hospital bed manufacturers, continues to advance products that incorporate digital capabilities that include wireless bed alarms, patient fall protection, and integration with electronic health records systems and other documentation of patient vital measures. Its beds also integrate with other smart devices, which also aims to reduce clinician burden and the multiplicity of devices to manage.

Stryker also has sought to diversify beyond medical and surgical equipment over the last two decades, making acquisitions in orthopedics technology as well as neurotechnology. In these lines, its products include implants used in joint replacement and trauma surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling and emergency medical equipment; neurosurgical, neurovascular and spinal devices.

Vocera’s claim to fame in healthcare technology were its communication badges, that support contact between clinicians, facilitating support functions, and nuts-and-bolts activities, such as securely swiping into areas of provider facilities. But in recent months, Vocera has been innovating in other clinical communication initiatives.

For example, late last year Vocera began to market technology created through a collaboration with Amazon to deliver Vocera skill for Alexa, Amazon’s voice-activated interactive tool. Vocera’s capability is intended to enable an easy and personal way for hospitalized patients and aged care residents to connect with caregivers and others. Vocera says the voice assistant technology will help provider care teams with capabilities that enables them to save time and personalize care. The company envisions the technology to help patients and visiting family members to get information and connect with care team members.

Beyond offering solutions to enhance patient and family engagement, Vocera has expanded beyond its communication device beginnings to incorporate secure connections through mobile applications, including the Vina smartphone app, which it launched about two years ago.

The merger bears watching as it enables the combined Stryker-Vocera to meet new needs in the healthcare ecosystem, said John Moore, CEO and founder of Chilmark Research, a healthcare IT consultancy.

“This fits within the broader context of the melding of devices, intelligence (artificial intelligence and machine learning, and communication and (clinician) action,” Moore said. “We have been more interested in the chronic care management market, such as hospital at home, and this is targeted more at acute care. But in time, it could migrate the support ambulatory models of care.”

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