Stryker Corporation (NYSE:SYK) announced Wednesday that it has agreed to purchase MAKO Surgical Corp. (NASDAQ:MAKO) in a $1.65 billion deal. The deal will give Stryker access to the robotic-assisted orthopedic surgery platform of MAKO Surgical. The  Kalamazoo, Michigan-based orthopedics product maker will be paying $30 per MAKO Surgical share. That’s about an 86 percent premium to Tuesday’s closing price of $16.17 per share.

Stryker Corporation

MAKO Surgical Corp. (NASDAQ:MAKO) announced it will issue 4 million new shares in connection with the acquisition. MAKO Surgical Corp. (NASDAQ:MAKO) shares surged 82.62 percent in pre-market trading to $29.54.  MAKO Surgical Corp. (NASDAQ:MAKO), which was founded in 2004, is considered the pioneer of advanced robotic assisted surgery in orthopedics. It makes an interactive robotic arm that assists surgeons in knee and hip replacement surgery.

The deal will bring down Stryker’s earnings

Stryker Corporation (NYSE:SYK) CEO Kevin Lobo said that MAKO Surgical Corp. (NASDAQ:MAKO)’s technology has a long-term potential in joint surgery. Their combined technological expertise will help simplify joint reconstruction procedures. Analysts expect the U.S. knee and hip market to keep growing at mid-single digit rates.

Stryker Corporation (NYSE:SYK) said that the acquisition will reduce its EPS by 10-12 cents in the first full year after closing the deal. It will have a neutral impact during the second year, and start contributing to the bottom line from the third year. As of June 30, Stryker has $4.7 billion in cash.

Stryker director unloads shares

In a surprise move, Stryker Corporation (NYSE:SYK) director Ronda Stryker sold off 14,000 shares of the company on Tuesday. She unloaded the stock at an average price of $71.11 per share. Citigroup Inc (NYSE:C) acted as the financial adviser of Stryker on the transaction.

RBC Capital has an outperform rating on Stryker Corporation (NYSE:SYK). The research firm recently increased its price target on the stock to $81 from $74.

Stryker Corporation (NYSE:SYK) shares skidded 1.91 percent to $69.44, while MAKO Surgical Corp. (NASDAQ:MAKO) stock jumped 82.68 percent to $29.58 at 9:48 AM EST.