Steris Agrees to Buy Pink Pad Maker Xodus Medical for $2.1 Billion

Key points

Steris agreed to acquire Xodus Medical for $2.1 billion in cash at closing, plus potential earnout consideration of up to $150 million tied to 2028 performance targets.

Steris said expected cash tax benefits of about $300 million bring the net purchase price to approximately $1.8 billion, as reported by MedTech Dive.

The deal is expected to be financed primarily with debt and to close by Dec. 31, 2026, subject to regulatory approvals.

Steris has agreed to acquire Xodus Medical, a Pennsylvania maker of operating room safety products best known for its Pink Pad patient positioning systems, for $2.1 billion in cash at closing, according to a Form 8-K filed by Steris. The companies announced the deal on Monday, Oct. 12.

The purchase agreement, signed Oct. 11, also provides for additional earnout consideration of up to $150 million, payable if Xodus meets specified performance targets in calendar 2028. The $2.1 billion closing payment is subject to customary adjustments.

Debt-financed, closing targeted for year-end

Steris said it expects to finance the acquisition primarily with debt and to close by Dec. 31, 2026, subject to customary closing conditions and regulatory approvals. JPMorgan Chase Bank and Goldman Sachs Bank USA committed to provide up to $2.0 billion in a senior unsecured bridge facility, according to the filing. Either side may terminate the agreement if the deal has not closed by July 12, 2027, a date that can be extended to Jan. 11, 2028, in certain circumstances.

The sellers are Craig E. Kaforey and Mark A. Kaforey, individually and as trustees of family trusts, according to the filing. Craig Kaforey is Xodus' chief executive.

Steris also said cash tax benefits of about $300 million would reduce the net purchase price to approximately $1.8 billion, and that Xodus expects sales of $245 million this year, MedTech Dive reported.

Adding consumables to the operating room

Xodus, founded in 1993 and headquartered near Pittsburgh, sells a portfolio of surgical safety products under the slogan "Making Surgery Safer," according to the company's announcement. Its products include the Pink Pad positioning systems and the See Sharp laparoscopic cleaning and defogging device, according to MedTech Dive. In April, Xodus announced FDA 510(k) clearance and the launch of its Hot Pink Pad, which combines underbody warming with Pink Pad positioning.

"Xodus Medical's product portfolio complements and expands STERIS's offering, particularly by adding consumables used in the operating room," said Dan Carestio, Steris' president and CEO. "The business has demonstrated an ability to grow at double-digit rates with its specialty product portfolio, a steady stream of new products, and a highly effective commercial team."

Craig Kaforey said joining Steris "represents an exciting new chapter for Xodus Medical and an opportunity to build upon everything our talented team has accomplished over the past three decades."

A larger deal than usual for Steris

Steris, which sells hospital disinfection and sterilization equipment and services, has generally favored small tuck-in deals. MedTech Dive noted that the company completed two tuck-in acquisitions valued at about $23.4 million in its last fiscal year and that its most recent large deal was a $540 million purchase of assets from BD in 2023. Needham analysts called the financial terms of the Xodus deal reasonable, according to MedTech Dive.

Goldman Sachs is Steris' exclusive financial advisor and Jones Day its legal counsel; J.P. Morgan and Morgan, Lewis & Bockius are advising Xodus.

Key points

Debt-financed, closing targeted for year-end

Adding consumables to the operating room

A larger deal than usual for Steris

Sources