Posted in Medical Device Business by Nancy Crotti on December 15, 2014
Just when you thought they couldn’t get more widespread or expensive, the medical device mergers-and-acquisitions of 2014 continue to astound.
Allergan (Irvine, CA), which has fought off a hostile takeover attempt by Valeant Pharmaceuticals International for the past eight months, has agreed to a $66 billion takeover by Dublin, Ireland, pharmaceutical firm Actavis.
The offer from Actavis would be the biggest deal of the year, eclipsing Medtronic’s $43 billion offer for another Dubliner, Covidien, in the medical device sector. But the resulting Medtronic plc, with about $27 billion in revenues, may become first runner-up in sales in 2015, behind Johnson & Johnson, whose estimated sales topped $28.1 billion in fiscal 2013.
In May, Thermo Fisher Scientific finished its $13.6 billion acquisition of Life Technologies Corp. (Carlsbad, CA), which would give lab products maker Thermo Fisher access to the DNA sequencing market.
Then there’s the intramunicipal deal in Warsaw, IN, where orthopedic device manufacturer Zimmer Holdings Inc. (ZMH) plans to acquire competitor Biometin a $13.4-billion merger. If approved, the newly formedZimmer Biomet would be the world’s second-largest orthopedic products group. Combined, Zimmer and Biomet would have enough strength to surpass Stryker in size in the global orthopedics market, knocking Stryker down to third place, according to EvaluateMedTech, a market intelligence firm.
Medtech giant Becton, Dickinson and Co. (Franklin Lakes, NJ) announced in October it would acquire CareFusion (San Diego) for $12.2 billion in cash and stock. CareFusion shareholders are scheduled to vote January 21, 2015 on the proposed merger. The two companies combined have experienced annual revenue of $11.9, so the merger should create one of the 10 largest medical device companies in the world.
For a mere $3.3 billion in stock, U.S. bone-implant maker Wright Medical Group Inc. (Memphis, TN) will merge with orthopedic device-manufacturer Tornier N.V. to create a new company based in the Netherlands.
Then there is the occasional mystery merger. Wireless heart-monitoring device maker Preventice (Minneapolis) has merged with eCardio Diagnostics (Houston) which makes more traditional remote cardiac monitoring systems. Terms were not disclosed, but the combined organization employs about 500 people full-time.
Some acquisitions aren’t as large in terms of transaction costs as they are in boosting a company’s sales. Dublin, OH–based Cardinal Health announced in April it would spend $320 million to acquire AccessClosure (Santa Clara, CA) and its extravascular closure device technology.
Kalamazoo, MI–based Stryker announced earlier this year that it is rounding out its portfolio through the acquisition of Small Bone Innovations Inc. (Sbi), a privately held company headquartered in Morrisville, PA, at a net cost of $285 million. The deal included SBi's Scandinavian Total Ankle Replacement System, referred to as the STAR Ankle. Sbi touted their Star Ankle, sold globally in over 40 countries, as the only PMA-approved, cementless, three-piece total ankle replacement system.
