The deal, which has an enterprise value of $4.6 billion when factoring in Cantel’s net debt and convertible notes, will see STERIS’ U.S. subsidiary acquire the infection prevention specialist for $84.66 in cash and stock per common share, based on STERIS’ Jan. 11 closing price of $200.46.
“We believe Cantel and STERIS are a perfect strategic fit, and this combination is a natural next step for our company, enabling us to accelerate progress on our Cantel 2.0 initiatives and drive enhanced value for shareholders and the health care providers and systems we support,” Cantel CEO George Fotiades said in a prepared statement. “The last year has demonstrated more than ever the importance of innovative and comprehensive infection prevention and control solutions that protect health care providers and patients.
“Together with STERIS, we will be able to provide a more extensive and innovative suite of offerings to our customers around the world. Importantly, STERIS recognizes that our proven and talented team is the foundation of Cantel’s success, and we look forward to working collaboratively to bring our two organizations together.”
Under terms of the transaction, Cantel stockholders will receive about $16.93 in cash and 0.33787 of a STERIS ordinary share for each Cantel common share.
Both companies’ boards of directors have approved the deal, which will expand STERIS’ endoscopy offerings and give it entry into the dental segment, among other benefits.
“We are pleased to reach this agreement with STERIS, which is the culmination of a robust process to achieve an outcome that allows Cantel shareholders to participate in the significant upside of the combined company, while also providing them with immediate cash value,” Cantel Chairman Charles M. Diker said in a statement. “Together with STERIS, we believe the value opportunity is compelling, both today and in a post-COVID world, as the combined company will have the scale, breadth and depth to unlock substantial value that will drive further benefits for Cantel shareholders, customers and all stakeholders.”
The transaction is expected to close by the end of the first quarter of STERIS’ 2022 fiscal year — June 30 — pending customary approvals and conditions.
Guggenheim Securities is STERIS’ financial adviser, while Jones Day is its legal counsel. JPMorgan Chase Bank N.A. was sole lead arranger and book runner for bridge financing. Centerview Partners LLC is Cantel’s financial adviser, while Wachtell, Lipton, Rosen & Katz is its legal counsel.