K2M shareholders file to block $1.4B Stryker merger: 5 things to know

Written by Mackenzie Garrity | October 15, 2018 | Print  |

A few of K2M's shareholders filed a suit Oct. 12 to block the device company's $1.4 billion merger with Stryker, according to Law 360.

Here are five things to know:

1. In August, Stryker agreed to acquire K2M's outstanding stock for $27.50 per share. K2M shareholders are arguing the statement transaction for the acquisition does not reflect K2M's accurate financial projections.

2. In the lawsuit, K2M shareholders argue the merger statement failed to include information used to calculate key financial metrics shareholders needed to know prior to voting on the deal. Additionally, the lawsuit claims the deal undervalues K2M.

3. The $1.4 billion value does not account for K2M's recent financial performance, according to the suit. Financial reports have shown steady growth over the past four years. Recent FDA approvals are also projected to boost K2M's market position.

4. While the proxy statement includes financial projections for 2018 through 2022, it fails to include how the financial projections were determined, including adjusted earnings before interest, taxes, depreciation and amortization, according to the report.

5. K2M shareholders also claim the statement does not include information on the analysis conducted by the company's financial advisor, Piper Jaffray & Co.

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