Next multi-billion dollar medical device merger forecast

Large and medium-sized companies are relatively professional and grow at an appropriate rate, which makes them attractive to mergers and acquisitions, and several companies meet this requirement. In response, EVantage provided a number of candidates, produced a list of potential M&A targets, and gave reasons for the list.

Professional VS high growth

In this year was more than $ 1 billion price of the acquisition of six medical technology companies, in addition to Covidien (Covidien), most of the other company's revenue comes from a single therapeutic areas. Less than half of Kehui Medical's sales come from hospital equipment, so it is quite professional.

From the performance of the acquired company, the high growth rate seems to be a dispensable feature. For example, Tornier, an orthopedic specialist acquired by Wright Medical, and Nobel Biocare, a dental specialist acquired by Danaher, predicted an annual growth rate of 8% and 5, respectively. %.

What's more, Biomet and Care Fusion grew by only 3.8% and 3.4% when they were acquired by Zimmer and Becton Dickinson.

Several interesting candidates can be found by applying similar parameters to the evaluate Medtech database (see table above). The analysis included sales of medical technology products in excess of $1 billion in 2013, and at least 45% of them were from single-area companies. In addition, these companies have an annual growth rate of more than 4%, although this is not so important, but it must also be a factor that is conducive to the company's selection.

Osteosurgery is leading the trend of M&A this year, so many people want to know if there is a possibility of a bigger merger. If Wright Medical is not the last company to acquire a major in orthopedics, then Stryker may be a target, but its market capitalization is more than $33 billion and can only be acquired by very large companies. Medtronic is currently taking care of it, and J&J's recent strategy has involved divestiture, not acquisitions.

Shi Lehui is also very likely to be the target of the acquisition, although the new US tax laws make the UK-based company may not be as attractive as it used to be. But the company is the right size, easy to merge, and its product portfolio fits well with a larger orthopedic specialist. In fact, the merger of the two orthopedic specialists in the table is not entirely shocking.

Next multi-billion dollar medical device merger forecast

Provide buyers with growth drivers

French lens manufacturer Essilor is the fastest growing among the top 10 companies in the medical technology industry. It is not a traditional medical technology group, and its sales share is mostly from spectacle lenses, so it is unlikely to be acquired by a pure medical technology company.

However, companies like Novartis may have the potential to become buyers of the company. Essilor lenses can be complemented by products developed by Alcon. Essil's 8% annual growth rate will undoubtedly revive Alcon, and the company's current growth forecast is expected to grow at a rate of 4% per year to 2020.

The cardiovascular department is well represented in this analysis. But Pioneer Edwards, the pioneer in the field of transcatheter heart valve intervention, has yet to be acquired. The company may be a good fit for Abbott Laboratories, Boston Scientific or St. Jude and will be their growth engine.

St. Jude itself is not as professional as Edwards, but it is also an alternative cardiovascular company. It has collaborated with Abbott to sell cardiovascular devices in the United States, and the synergy effect has also reached expectations. In addition, St. Jude's advantages in electrophysiology and cardiac surgery are well coordinated with Abbott's interventional heart product line. The resulting new company will have a sufficient scale to compete better with Boston Science, although it will still be slightly inferior to the consortium after Kehui and Medtronic.

Obviously, the in vitro diagnostic company was absent from the 2014 acquisition boom. Perhaps because it relies more on licensing agreements than other segments of the medical technology industry, such as working with large pharmaceutical companies to conduct complementary diagnostics. However, the enviable double-digit growth rate of Sysmex has it for a large but relatively slow-growing company, such as Siemens or Thermo Fisher Scientific. Quite attractive prospects.

Of course, it is impossible to predict which companies will make the next multi-billion dollar merger. This analysis is at most a thought experiment. The crux of the matter is that almost every medical technology company with a market capitalization of more than $1 billion must defensively expand its scale to remain competitive, or it may be merged by its competitors.

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