By Susan Kelly
(Reuters) - The chief executive officer of U.S. medical device maker Stryker Corp (N:SYK), recently rumoured to have been preparing a bid for British rival Smith & Nephew Plc (L:SN), said on Tuesday that acquisitions are his top priority for spending cash, but he gave no hint that any sort of deal was imminent.
The timing of acquisitions is unpredictable, Stryker Chief Executive Officer Kevin Lobo said on the company's fourth-quarter earnings conference call.
"Right now we are pursuing the acquisition deal flow, and we'll see what happens," Lobo said. "We do plan to put our money to work."Rumours that Stryker could bid soon for fellow orthopaedic implant maker Smith & Nephew, frequently named as a possible takeover candidate, surfaced late last month.
Smith & Nephew CEO Olivier Bohuon, speaking earlier this month at an investor conference, said the company had not decided to follow other medical device makers that are bulking up through mergers.
Years of slow growth and persistent price erosion have prompted some large mergers in the orthopaedic implant sector, with Johnson & Johnson (N:JNJ) buying Swiss device maker Synthes for about $21 billion (£14 billion) in 2012, and Zimmer Holdings Inc (N:ZMH) in the process of acquiring privately held Biomet for $13.4 billion.
Stryker itself has been active in acquiring smaller companies, including its $1.65 billion deal for Mako Surgical Corp in 2013.
The Kalamazoo, Michigan-based maker of artificial hips and knees and other hospital supplies said on Tuesday its fourth-quarter net earnings fell 33 percent to $260 million, or 67 cents a share, hurt by charges for product recalls and costs related to opening a regional headquarters in Europe.
The company earned $386 million, or $1.01 a share, a year ago. Sales rose 6.1 percent to $2.62 billion in the latest quarter.