STERIS Agrees To Buy Xodus Medical For $2.1 Billion In Cash, With Up To $150 Million Earnout
The deal is financed mainly with debt, backed by a $2.0 billion bridge facility, and is anticipated to close by December 31, 2026.
STERIS agreed to buy Pennsylvania surgical products maker Xodus Medical for $2.1 billion in cash at closing, according to an 8-K filed Tuesday. The sellers could collect up to $150 million more if Xodus hits performance targets in calendar 2028.
What the 8-K says
STERIS Corporation, a wholly owned subsidiary of STERIS plc, signed a Purchase and Sale Agreement on Sunday with Craig E. Kaforey and Mark A. Kaforey, who sign individually and as trustees of their legacy trusts. Craig Kaforey also acts as seller's representative. The buyer gets all the equity interests of Xodus Medical and certain related affiliates.
The $2.1 billion cash price is subject to customary adjustments. The earnout of up to $150 million depends on specified post-closing performance targets in calendar 2028.
STERIS expects Xodus to generate about $245 million in 2026 revenue and says the business has grown at double-digit rates, according to Becker's Hospital Review.
How it is paid for
The filing says the purchase is expected to be financed primarily with debt. JPMorgan Chase Bank and Goldman Sachs Bank USA committed on Sunday to provide up to $2.0 billion in a senior unsecured bridge facility, a short-term loan meant to be replaced by longer-term funding.
The commitment shrinks dollar for dollar as STERIS raises net proceeds from permanent financing or asset sales, before or after closing. The company's own risk list includes the level of its indebtedness limiting financial flexibility or raising future borrowing costs.
Timing and risks
STERIS anticipates closing by December 31, 2026, subject to customary conditions and regulatory approvals. Either side can terminate if the deal has not closed by July 12, 2027, a date that can be extended in certain circumstances to January 11, 2028.
The filing also flags the risk that approvals may not arrive, may take longer than expected or may carry adverse conditions. It adds that expected cost savings and cash tax benefits may not materialize on schedule, and that the deal may not add to earnings as anticipated. The sellers take on confidentiality, non-solicitation and non-compete obligations.
The next marker is regulatory clearance ahead of the targeted December 31, 2026 close, and whether STERIS swaps the bridge for permanent financing.
Sources
- 8-K Filing — STERIS plc (STE) — SEC EDGAR
- Steris Agrees to Buy Xodus Medical for $2.1 Billion - WSJ — The Wall Street Journal
- Medical device company Steris inks $2.1B surgical supply deal — beckershospitalreview.com
