Inari Medical acquired by Stryker: fairness opinion by Morgan Stanley
Deal terms
Implied value per share by method vs. $80.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Morgan Stanley to the target board
Discounted cash flow assumptions
Unlevered free cash flows for fiscal years 2025 to 2031 plus terminal value discounted to present value as of December 31, 2024; adjusted for estimated net cash of $107 million as of December 31, 2024; fully diluted shares using treasury stock method.
Selected public companies (5)
Penumbra, Inc. · Inspire Medical Systems, Inc. · iRhythm Technologies, Inc. · TransMedics Group, Inc. · AtriCure, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| AV / 2025E Revenue | 3.0x | 4.9x | 6.8x | 3.0x–6.8x | $36.75–$81.75 |
Selected precedent transactions (14)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2024-06-18 | Silk Road Medical, Inc. | Boston Scientific Corporation | — |
| 2024-01-08 | Axonics, Inc. | Boston Scientific Corporation | — |
| 2022-01-06 | Vocera Communications, Inc. | Stryker Corporation | — |
| 2021-10-06 | Baylis Medical | Boston Scientific Corporation | — |
| 2021-08-06 | Intersect ENT, Inc. | Medtronic plc. | — |
| 2020-12-18 | BioTelemetry, Inc. | Philips Holding USA Inc. | — |
| 2018-11-20 | BTG plc. | Boston Scientific | — |
| 2018-09-20 | Mazor Robotics Ltd. | Medtronic plc. | — |
| 2018-08-30 | K2M Group Holdings, Inc. | Stryker Corporation | — |
| 2017-08-07 | NxStage Medical, Inc. | Fresenius SE & Co. KGaA | — |
| 2017-06-28 | Spectranetics Corp. | Philips Holding USA Inc. | — |
| 2017-02-14 | Cynosure, Inc. | Hologic, Inc. | — |
| 2017-02-13 | ZELTIQ Aesthetics, Inc. | Allergan Holdco US, Inc. | — |
| 2016-06-07 | LDR Holding Corporation | Zimmer Biomet Holdings, Inc. | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| Transaction Aggregate Value / NTM Revenue (applied to 2025E revenue) | — | — | — | 4.3x–11.3x | $52.00–$134.75 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Historical Trading Prices (52-week, for reference only) | 52-week period ending January 3, 2025: highest intraday price $65.94 and lowest intraday price $36.73 per share. | $36.73–$65.94 |
| Equity Research Analyst Price Targets (for reference only) | Undiscounted 12-month price targets from 14 analysts ranged from $48.00 to $86.00 per share; discounted to January 3, 2025 at a 10.0% cost of equity yielded $43.75 to $78.25 per share. | $43.75–$78.25 |
| Discounted Equity Value Analysis (for reference only) | Applied AV/revenue multiples of 3.0x to 6.8x to projected 2027 revenue, adjusted for estimated net cash of $170 million as of December 31, 2026, and discounted back to December 31, 2024 at 10.0% cost of equity. | $45.00–$99.75 |
| Selected Premiums Paid (for reference only) | Reviewed premiums to last closing price for targets in the precedent transactions and applied the 11% to 64% range to Inari's January 3, 2025 closing price. | $55.50–$81.50 |
Fee of approximately $68.5 million, of which $5.0 million became payable upon delivery of the opinion and the remainder payable on consummation of the Merger. In the two years prior to the opinion, Morgan Stanley received no fees from Inari and received aggregate fees of between $2 million and $3 million from Stryker for financing services.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $722M | $874M | $1.1B | $1.3B | $1.5B | 20.3% |
| Revenue growth | 19.7% | 21.1% | 21.9% | 19.9% | 18.3% | |
| EBITDA | $44.0M | $77.0M | $154M | $230M | $317M | 63.8% |
| EBITDA growth | — | 75.0% | 100.0% | 49.4% | 37.8% | |
| EBITDA margin | 6% | 9% | 14% | 18% | 21% | |
| Implied EV / EBITDA | 111.4x | 63.6x | 31.8x | 21.3x | 15.5x |
Year-1 growth is against LTM at announcement ($603M revenue, $-30.7M EBITDA); later years are year over year.
Inari management prepared unaudited standalone Projections for fiscal years 2025 through 2031, approved by the Board on December 5, 2024 for Morgan Stanley's use. Revenue grows from $722 million in 2025E to $1,949 million in 2031E, with Adjusted EBITDA of $44 million in 2025E rising to $487 million in 2031E, gross profit of $623 million to $1,627 million, and unlevered free cash flow of $(64) million in 2025E rising to $340 million in 2031E. A three-year subset (FY2025-FY2027) consistent with the Projections was shared with Stryker, Company A and Company B on December 24, 2024.
Process notes
Other Medical Devices and Supplies fairness opinions
- Hologic / Blackstone / TPG 2025 · 14.1x EV/EBITDA
- ZimVie / ARCHIMED 2025 · 10.8x EV/EBITDA
- LENSAR / Alcon 2025
- Nevro / Globus Medical 2025
- Integer / KKR 2026 · 14.6x EV/EBITDA
- Sanara MedTech / MiMedx Group 2026 · 20.6x EV/EBITDA
All Medical Devices and Supplies opinions → · Morgan Stanley opinions