Medical device maker Inari Medical (NARI) may not be a readily-recognized name, but it is about to be part of a much bigger, and probably more recognizable, name: Stryker. Stryker agreed to buy Inari Medical, and the stock has been on the rise ever since. It is up fractionally in Wednesday afternoon’s trading even today, though there are some concerns brewing in the background.
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Stryker’s plan to buy Inari Medical is just a straight cash purchase, noted a Wall Street Journal report, in which Stryker will buy all common stock for $80 per share. That represents a total value of about $4.9 billion, which is a healthy valuation for a company whose revenue was about $603 million for 2024. At that rate, Stryker could expect a payback period of a little over eight years.
It may not even take that long; Inari Medical has a portfolio of goods all its own, granted, but it also comes with its own book of business that Stryker can sell to. And Stryker can also open up Inari Medical products to its own customers, which should accelerate the payback period that much more. With the mechanical thrombectomy industry in the United States currently valued around $6 billion, and expected to grow 20% annually—and Inari offering a range of mechanical thrombectomy products—the end result should be positive for Stryker.
Cue the Inevitable
Naturally, that is when the lawyers emerged, wondering if the cash shareholders are about to receive for selling off their Inari shares to Stryker is sufficient. Halper Sadeh LLC has already started an investigation to find out if that $80 per share offer is “fair to shareholders,” noted a Business Wire report. Given that shares are still selling for under $80 per share, it certainly seems like that is the case.
But Halper Sadeh is still investigating on three fronts. One, if this was the best possible consideration for Inari shareholders. Two, if Stryker is underpaying, which seems like the first front just restated slightly, and three, if all necessary information was disclosed to allow Inari shareholders to “…adequately assess and value the merger consideration.”
Is Inari Medical a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NARI stock based on eight Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 34.73% rally in its share price over the past year, the average NARI price target of $64.83 per share implies 18.39% downside risk.
