Part I: Mergers & Acquisitions: A Major Strategic Play In the Medical Device Industry - EngiLifeSciences
Medical Device Industry

Part I: Mergers & Acquisitions: A Major Strategic Play In the Medical Device Industry

By May 3, 2016 No Comments

Mergers and Acquisitions are a major part of strategic play for medtech companies. A consolidation trend has been occurring in the industry the past several years and will likely continue throughout 2016. Large companies have set their sights on dominating market share and acquiring innovations to shore up their offerings. Smaller, well-positioned companies continue to focus on building their unique offerings to foster attractive valuations and terms for acquisition.

Last year the Medical Device Industry witness some of the largest megamergers with several transactions exceeding $1 billion in value. These included:

  • Cardinal Health’s $1.9-billion acquisition of Cordis Vascular, a leading provider of stents, interventional catheters, balloons, and guidewires.
  • Zimmer’s $13.4-billion acquisition of Biomet, increasing their portfolio of orthopedic products.
  • Roche Holding’s $1-billion acquisition of a 56.3% ownership interest in Foundation Medicine, the leading provider of tumor testing procedures.
  • Hill-Rom, Inc.’s $2.05 million acquisition of Welch Allyn Inc. creating a broad array of complementary patient care products.
  • Ireland-domiciled Mallinckrodt Pharmaceuticals, a provider of various pharmaceutical products, medical imaging equipment, and therapies for autoimmune and rare diseases, acquired Therakos, a producer of immunotherapy treatment devices for $1.33 billion.
  • Opko, a relatively small biopharma and diagnostics company acquired Bio Reference Laboratories for $1.47 billion, making it one of the largest medical lab companies in the United States.
  • Medtronic acquired Apdus Endosystems for $110 million, a provider of devices for minimally invasive endovascular and aneurysm repair and thoracic endovascular repair. On the same day they also acquired Cardiosight Technologies, a developer of cardiac assessment.

As mergers and acquisitions continue to saturate the medical device industry significant challenges arise. Harmonization of quality systems are a critical component to integration and a solidification of market positioning. Mergers and acquisitions impact multiple processes that need to integrate together.

Differing quality systems and technologies often create multiple challenges in integration. New regulations and compliance criteria may need to be incorporated into the new array of product offerings. Merger and acquisition strategies are more successful when the variants between organizations are identified and strategized before the transaction takes place. If there is not the ability to plan prior to the transaction an immediate integration plan with experts in MedTech Merger and Acquisitions can save significant costs and also reduce the time of product to commercialization.

At EngiLifeSciences, we specialize in consolidation and harmonization of processes for merger and acquisitions for Quality Systems and Technology. Our focus is to identify the critical areas of Mergers and Acquisitions: Product Development, Supplier Management, Manufacturing, Regulatory, Quality Systems, Information Technology. Each of these areas will have variants that need to be identified and consolidated in a quality and performance based matrix that has checks and balances.

Failure to consolidate can be extremely costly and impact visibility across the enterprise. EngiLifeSciences provides full consultative services that will help you navigate the challenges.

Medical Dev. & Diag. – Mergers and Acquisitions. BioSpace. Medical Dev. & Diag. – Mergers and Acquisitions. Retrieved 2016-04-28
Topic: M&A. Fierce Medical Devices. M&A. Retrieved 2016-04-28
Inside Medical Devices. Covington and Burling LLC. Archives: Transactions. Retrieved 2016-04-28.
MedTech’s Biggest Deals of 2016. Medical Device and Diagnostic Industry. Retrieved 2016-4-27.

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