Steris PLC (NYSE: STE) posted better than expected results for the second quarter of FY 21. The company has reported adjusted net income for the second quarter of fiscal 2021 of $127.3 million, compared to the previous year’s second quarter of $113.1 million. Healthcare revenue declined 3% in the second quarter to $470.9 million. Q2 2021 revenue for Applied Sterilization Technologies grew 11% as reported to $169.5 million compared with $152.9 million in the same period last year with operating income of $76.8 million in the second quarter of fiscal 2021 compared with operating income of $65.4 million in the same period last year mainly due to the increased volume and lower travel expenses. Life Sciences second quarter revenue grew 17% to $115.7 million with operating income of $46.4 million compared to $32.3 million in the prior year’s second quarter.

STE in the second quarter of FY 21 has reported the adjusted earnings per share of $1.48, beating the analysts’ estimates for the adjusted earnings per share of $1.24, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 3 percent to $756.13 million in second quarter of FY 21, beating the analysts’ estimates for revenue by 7.23%.

On the other hand, the company has signed a definitive agreement for purchasing Key Surgical, a portfolio company of Water Street Healthcare Partners, LLC, through a U.S. subsidiary for the total consideration of $850 million.  STERIS expects that the acquisition will qualify for a tax benefit related to tax deductible goodwill.  After the adjustment for the present value of the anticipated tax benefit, the purchase price will be approximately $810 million. The company expects annual revenue for Key Surgical in calendar 2020 to be approximately $170 million, with adjusted EBIT expected to be of approximately $50 million. The deal will be financed through a combination of debt and cash on hand and is expected to close by December 31, 2020 pending customary closing conditions and regulatory approval.  The transaction is projected to be immediately accretive to STERIS’s adjusted earnings after close and add approximately $40 million to revenue and about $0.10 to adjusted earnings per diluted share in STERIS’s fiscal 2021 fourth quarter.  STERIS projects to realize annualized pre-tax earnings synergies of $10-$15 million by year three after the close.