STERIS agrees to acquire Xodus Medical for $2.1 billion in cash
The deal carries up to $150 million in earnout payments tied to 2028 performance targets, and the company expects to fund it mainly with debt.
Key takeaways
- STERIS plc (STE) said in a regulatory filing that its subsidiary STERIS Corporation agreed on Oct. 11 to acquire Xodus Medical, Inc., a Pennsylvania specialty surgical products business, for $2.1 billion in cash, plus up to $150 million in earnout payments. The deal is expected to close by Dec. 31, 2026.
STERIS plc (STE) said Tuesday in a regulatory filing that its wholly owned subsidiary, STERIS Corporation, agreed on Oct. 11 to acquire Xodus Medical, Inc. for $2.1 billion in cash, subject to customary adjustments.
The purchase covers all equity interests in Xodus Medical and certain related affiliates. The filing refers to them collectively as Xodus.
Xodus is a specialty surgical products business based in Pennsylvania, according to the filing.
The sellers are Craig E. Kaforey and Mark A. Kaforey. Craig Kaforey entered into the agreement individually, as trustee of his legacy trust and as seller's representative. Mark Kaforey entered into it individually and as trustee of his own legacy trust.
The agreement also provides for earnout consideration of up to $150 million. Payment depends on specified post-closing performance targets in calendar 2028.
The company expects to finance the acquisition primarily with debt. To support that, STERIS plc and STERIS Corporation entered into a bridge financing commitment dated Oct. 11.
JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA are the commitment parties. They agreed to provide up to $2.0 billion in aggregate as a senior unsecured bridge facility, subject to customary conditions.
The commitment can be reduced dollar for dollar by net proceeds from permanent financing or asset sales raised before or after the closing.
The company anticipates the acquisition will close by Dec. 31, 2026. Closing is subject to customary closing conditions and regulatory approvals.
Either the purchaser or the sellers may terminate the agreement if the acquisition has not occurred by July 12, 2027. That date can be extended to Jan. 11, 2028 under certain circumstances.
The agreement includes customary representations, warranties and covenants. It also imposes customary confidentiality, non-solicitation and non-compete obligations on the sellers.
The filing mentions cost savings, tax benefits and other synergies expected from the acquisition. It does not quantify them.
The filing does not give Xodus's revenue or earnings. It also does not describe the company's rationale for the deal in an executive's words.
STERIS plc's principal executive offices are in Dublin, Ireland.