MEDICAL DEVICES
Mergers and Acquisitions in the Medical Device space have increased recently since the sharp decline in 2009. The top deal year in the last decade was most certainly 2008 with 167 deals worth $69.3 billion. There were 177 deals in 2009 with dollars committed of a paltry $13.9 billion. While 2010 saw a slight recovery coming in at 185 deals for $41.6 billion, the M&A activity definitely showed promise in 2011 with $63.4 billion in 170 transactions. During the first three months of 2012, Deal Search Online, the Irving Levin Associates M&A Database, reported 43 deals valued at $3.2 billion in dollars committed.
In the medical device space, these three deals comprised over $33.0 billion of the total $63.4 billion:
JOHNSON & JOHNSON: In April 2011, health care giant Johnson & Johnson agreed to acquire Synthes, a global orthopedic manufacturer, in a transaction valued at $21.3 billion.
DANAHER CORP.: Beckman Coulter Inc., a manufacturer of diagnostic equipment, was acquired by Danaher Corp. in February 2011. Danaher Corp., a Fortune 200 NYSE-listed science and technology industry leader with more than 59,000 associates worldwide, is looking to utilize Beckman Coulter’s equipment to satisfy the increased demand for medical tests as people are living longer.
KINETIC CONCEPTS INC.: In one of the largest leveraged buyouts in the last decade, Apax Partners LLP, a private equity firm headquartered in London, agreed to acquire Kinetic Concepts Inc. in July 2011. Kinetic Concepts is a manufacturer of hospital beds and wound care products. The transaction totaled $4.98 billion in cash. As Kinetic’s annual revenue was $2 billion at the time, this transaction was valued at 2.49 times revenue.
EHEALTH
The eHealth sector reported more than 27 deals valued at $702 million in the first three months of 2012. The eHealth space has emerged out of the requirement for electronic medical records and need for advanced technologies and digital tools in health care. This sector includes telemedicine, consumer health informatics, online medical journals, online healthcare professional services, mobile healthcare information tools, medical research using grids, and healthcare software solution systems. Some highlights from deals in 2011 are as follows:
NEWERA HEALTH, INC.: In March 2011, NewEra Health, Inc. acquired Online Business Systems. NewEra Health is headquartered in Toronto, Canada and provides consulting services in IT Strategy, Architecture and Integration specializing in Health Information Exchange and Electronic Health Record systems.
SIEMENS HEALTHCARE: Siemens acquired health information exchange vendor MobileMD in November 2011. Siemens is based in Malvern, Pennsylvania and is a global leader in healthcare technology while MobileMD is based in Yardley, Pennsylvania and serves more than 110 hospitals and 2,000 physician practices.