Analyst Note| Aaron Degagne |
Narrow-moat Cantel Medical agreed to be acquired by narrow-moat Steris on Tuesday, Jan. 12, creating a titan in the U.S. sterilization market. Steris will be acquiring Cantel in a $3.6 billion cash and stock transaction, including debt, and the deal is expected to close by the end of June. We think this is a good agreement for both Cantel and Steris, with Cantel shareholders getting a deal worth about $85 per share, a premium of 30% over our $65 fair value estimate, while the Cantel acquisition should help Steris cement its position as a leader in the U.S. infection control and prevention market. We are leaving our $175 fair value estimate on Steirs intact and raising our fair value estimate on Cantel to $85 per share, in line with the purchase price.