Medical technology company Stryker Corporation (SYK) made a big splash Wednesday morning with the announcement that it would be purchasing robotic surgery maker Mako Surgical Corp. (MAKO) for $30 a share. The total deal is estimated to reach $1.65 billion, representing nearly double Mako’s value prior to the deal being announced.

Stryker pays big premium for Mako stock

Stryker’s decision to pay an 85 percent premium on shares of Mako undoubtedly made shareholders happy. Mako was up just under 82.5 percent today, taking it back to levels it hasn’t seen since May of last year. The company had experience a nearly 60 percent decline in share price from March of 2012 to earlier this month, with earnings reports showing continued problems with finding profitability. Stryker, though, clearly saw potential worth paying for.

"The combination of Stryker's established industry leadership with MAKO's innovative products and people contains the power to positively transform orthopedics," said Mako President and CEO Maurice R. Ferre, M.D. "It is with this in mind that MAKO's board of directors unanimously voted to recommend that MAKO's shareholders vote in favor of it."

"MAKO has established a compelling technology platform in robotic assisted surgery which we believe has considerable long term potential in joint reconstruction," said Kevin A. Lobo, President and CEO of Stryker. "The acquisition of MAKO combined with Stryker's strong history in joint reconstruction, capital equipment (operating room integration and surgical navigation) and surgical instruments will help further advance the growth of robotic assisted surgery. Our combined expertise offers the potential to simplify joint reconstruction procedures, reduce variability and enhance the surgeon and patient experience. We look forward to welcoming the MAKO team to Stryker."

Stryker’s shares were off almost 2.3 percent after the deal, which still requires approval by Mako shareholders.

Mako Surgical shorts not happy

Among the big losers in the deal will be the traders who are short Mako. Mako’s short float of 23.57 percent means that the company’s stock was one of the most shorted out there, making today’s big sale a bitter pill to swallow for many traders.