Investment and Acquisitions Trends in Medical Equipment Market 2011

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					    Investment and Acquisitions Trends in Medical Equipment
                         Market 2011
 Reference Code: GBIME0023MR                                                                                      Publication Date: March 2011

                                     The Majority of Mergers and Acquisitions That Took Place from 2006 to 2009 were of a Deal
                                     Value Less than $25m
                                     The medical equipment market offers strong growth prospects and is highly regulated and driven
Smaller firms are targeted           by constant technological innovation. The three largest markets for medical equipment are the US,
for acquisition by larger            the EU and Japan. The majority of mergers and acquisitions that took place from 2006-2009 were
medical equipment                    of a deal value less than $25m. Big companies operating in the fields of in vitro diagnostics,
companies, after receiving           orthopedics and cardiology are looking for acquisitions to enhance their growth prospects and
US FDA marketing                     diversify their portfolio. More than 74% of the deals were less than $25m in size from 2006 to 2009,
approval for their                   indicating that the medical equipment industry is highly fragmented and the need for new
products. Small firms                technological innovation is huge. The potential exit value of various start-up firms is less than
benefit from added                   $25m. The market is highly fragmented, with many small players with annual revenue less than
resources, while large               $5m. Small innovative firms are associated with developing new medical technology products.
firms gain from advanced             Most of these organizations specialize in only one technology and much redundancy exists
technologies                         between companies. Start-up firms in medical equipment companies are groomed by investors, so
                                     that they can be acquired by larger companies. Small firms, after receiving US FDA marketing
                                     approval for their products, are targeted for acquisition by large medical equipment companies.
                                     There exists an advantage for both small and large firms. Small firms benefit from added
                                     resources, while large firms gain from advanced technologies. Therefore all these factors and the
                                     fiscal pressure of staying afloat are compelling many smaller firms to merge with larger ones.

                                      Mergers and Acquisitions, Global, by Deal Value, 2006–2009

                                                                                         >$500m
                                                                                           5%
                                                                    $250m-$500m
                                                                        4%
                                                            $100m-$250m
                                                                5%
                                                      $50m-$100m
                                                          5%



                                                    $25m-$50m
                                                       7%




                                                                                                                            0-$25m
                                                                                                                             74%


                                      Source: GBI Research, Company Website




Investment and Acquisitions Trends in Medical Equipment                                                        GBIME0023MR /Published MAR 2011
Market 2011
                                                                                                                                             Page 1
                                                                              © GBI Research. This is a licensed product and is not to be photocopied
                                     Pharmaceutical Companies are Diversifying Their Portfolio by Acquiring Medical Equipment
                                     Companies
                                     Currently, pharmaceutical companies are diversifying their portfolios by acquiring medical
                                     equipment companies. Although pharmaceutical companies have been generating huge revenues,
                                     intense competition is seen in the pharmaceutical industry due to patent expiries and rising R&D
                                     costs. Pharmaceutical companies in the US and Europe are experiencing increasingly aggressive
                                     patent litigation, shortening the time of patent protection and accelerating the entry of generic
                                     versions. Even legislators are in favor of this approach, considering generics as a means to reduce
                                     the budgets for drug therapies. Therefore, pharmaceutical companies are diversifying into medical
                                     equipment companies, and the industry has witnessed mega deals. The pharmaceutical companies
                                     are trying to diversify their portfolios in high profit sectors by acquiring medical equipment
                                     companies. Moreover, medical equipment products have shorter product development time, which
                                     provides opportunity for pharmaceutical companies trying to cope with the pressures of declining
                                     bottom lines.

                                      Acquisition of Medical Equipment Companies by Pharmaceutical Companies
                                      Acquiring
                                                                   Target Company     Deal Value ($ billion)   Portfolio Acquired    Completed Date
                                      Company
                                      Novartis                     Alco n                              28.1    Ophthalmic devices    26-Aug-2010
                                                                   Advanced Medical
                                      Abbott                                                             2.8   Ophthalmic devices    26-Feb-2009
                                                                   Optics
                                      Source: GBI Research, Company Website



                                     The most significant deal was the acquisition of Alcon by Novartis in 2010, for a purchase
                                     consideration of approximately $28.1 billion. The acquisition has strengthened Novartis’ presence
                                     in the growing eye care sector market. The eye care sector provides a strong growth platform to
                                     Novartis, with excellent fit for their focused healthcare portfolio. Novartis has a huge opportunity for
                                     growth as 65 million people worldwide are suffering from glaucoma, and 22 million people are
                                     suffering from age-related macular degeneration. This provides huge opportunity for Novartis in the
                                     growing eye care sector. In 2009, Abbott acquired Advanced Medical Optics (AMO) for $2.8 billion
                                     to add ophthalmic device products to its existing pharmaceutical and diagnostics portfolio.
                                     In Vitro Diagnostic Companies Consolidating their Immuno-Chemistry Portfolio

  The immuno-chemistry                Immuno-Chemistry Devices Market, Global Revenue ($bn), 2009–2016
  devices market is one of
                                                                  25
  the largest segments in
  the in vitro diagnostic
  devices market, and major
  companies have begun                                            20
  concentrating on this
  market.
                                                  Revenue ($bn)




                                                                  15




                                                                  10




                                                                  5




                                                                  0
                                                                              2009                     2013                       2016


                                      Source: GBI Research, Company Website




Investment and Acquisitions Trends in Medical Equipment                                                                GBIME0023MR /Published MAR 2011
Market 2011
                                                                                                                                                     Page 2
                                                                                      © GBI Research. This is a licensed product and is not to be photocopied
                                     The immuno-chemistry devices market is one of the largest segments in the in vitro diagnostic
                                     devices market, and major companies have begun concentrating on this market. The immuno-
                                     chemistry devices market was estimated to be worth $13.9 billion in 2009 and is expected to grow
                                     at a rate of 5.8% annually. The market for treating major infectious diseases such as oncology,
                                     cardiovascular testing, HIV and the hepatitis B and C viruses (HBV and HCV) is being driven by the
                                     technological advancements in tissue staining and biopsy in cancer detection. Pharmacogenomics
                                     and the need for personalized testing to determine drug response will also drive the immuno-
                                     chemistry market in the future. There is high potential for profitability in this market, leading to
                                     M&As such as Siemens Medical acquiring Dade Behring for a purchase consideration of
                                     approximately $7 billion, to expand its product base in the immuno-chemistry segment as well as
                                     creating the first integrated diagnostic company. Inverness Medical Innovations acquired Standard
                                     Diagnostics for $205m, to enhance its immuno-chemistry devices portfolio and expand its product
                                     portfolio into rapid test kits, urine analyzing systems, enzyme-linked immunosorbent assay (ELISA)
                                     kits and medicine materials. The rapid test kits are found to be useful in various infectious
                                     diseases, such as sexually transmitted diseases, dengue fever, blood borne diseases, respiratory
                                     diseases and febrile diseases. Also, these rapid test kits are used for the diseases associated with
                                     fertility hormones, cancer markers, drug abuse and forensic tests.
                                     The US is the Biggest Market for Mergers and Acquisitions in Medical Equipment in 2009
                                     The US is one of the biggest markets for Mergers and Acquisitions (M&A) in medical equipment. In
                                     the last four year period from 2006-2009, the targets in medical equipment mergers and
                                     acquisitions were concentrated heavily in the US, Canada, Europe and Asia-Pacific. The US is the
                                     most attractive venue for M&A in the global medical equipment industry due to higher concentration
                                     of companies with key products and technologies in development stage. Ongoing cost containment
                                     pressures, the need to stay on the cutting edge of technology, and the need for market
                                     diversification are expected to further strengthen the ongoing consolidation in the market. In 2010,
                                     the deals that took place were Boston Scientific completing acquisition of Asthmatx, Cardinal
                                     Health acquiring Carefusion, Royal Philips Electronics acquiring Burton Medical Products,
                                     Medtronic completing acquisition of Osteotech, Johnson & Johnson completing acquisition of
                                     Micrus Endovascular, and Covidien completing acquisition of ev3.




Investment and Acquisitions Trends in Medical Equipment                                                  GBIME0023MR /Published MAR 2011
Market 2011
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                                                                        © GBI Research. This is a licensed product and is not to be photocopied
                                     1 Table of Contents
                                     1   Table of Contents ........................................................................................................................ 4
                                         1.1    List of Tables..................................................................................................................... 7
                                         1.2    List of Figures ................................................................................................................... 7
                                     2   Introduction .................................................................................................................................. 8
                                         2.1    GBI Research Report Guidance ....................................................................................... 9
                                     3   M&A Deals by Type ................................................................................................................... 10
                                         3.1    Medical Equipment Market, Global Financial Deals ........................................................ 10
                                     4   M&A Deals by Value Range, 2006–2009 .................................................................................. 12
                                         4.1    Mergers and Acquisitions................................................................................................ 13
                                     5   M&A Deals by Geography ......................................................................................................... 14
                                     6   Global Medical Equipment Market: Competitive Assessment.................................................... 15
                                         6.1    Medical Equipment, M&A Opportunities and Risk Evaluation ......................................... 15
                                         6.2    Key Takeaway ................................................................................................................ 17
                                     7   M&A Key Deals in 2010............................................................................................................. 18
                                         7.1    Novartis Completes Acquisition of Additional 52% Stake in Alcon from Nestle............... 18
                                            7.1.1    Overview.................................................................................................................. 18
                                            7.1.2    Deal Rationale ......................................................................................................... 18
                                            7.1.3    Deal Analysis ........................................................................................................... 19
                                            7.1.4    Company Profile ...................................................................................................... 20
                                         7.2    Merck Completes the Acquisition of Millipore.................................................................. 21
                                            7.2.1    Overview.................................................................................................................. 21
                                            7.2.2    Deal Rationale ......................................................................................................... 21
                                            7.2.3    Deal Analysis ........................................................................................................... 21
                                            7.2.4    Company Profile ...................................................................................................... 21
                                         7.3    Covidien Completes Acquisition of ev3 for $2.6 Billion ................................................... 22
                                            7.3.1    Overview.................................................................................................................. 22
                                            7.3.2    Deal Rationale ......................................................................................................... 22
                                            7.3.3    Deal Analysis ........................................................................................................... 22
                                            7.3.4    Company Profile ...................................................................................................... 23
                                         7.4    St. Jude Medical Acquires AGA Medical Holdings for $1.3 Billion .................................. 23
                                            7.4.1    Overview.................................................................................................................. 23
                                            7.4.2    Deal Rationale ......................................................................................................... 24
                                            7.4.3    Deal Analysis ........................................................................................................... 24
                                            7.4.4    Company Profile ...................................................................................................... 25
                                         7.5    Medtronic Completes Acquisition of Invatec and Affiliated Companies........................... 25
                                            7.5.1    Overview.................................................................................................................. 25
                                            7.5.2    Deal Rationale ......................................................................................................... 25
                                            7.5.3    Deal Analysis ........................................................................................................... 26
                                            7.5.4    Company Profile ...................................................................................................... 26
                                         7.6    St. Jude Medical Completes Acquisition of Light Lab Imaging ........................................ 27
                                            7.6.1    Overview.................................................................................................................. 27
                                            7.6.2    Deal Rationale ......................................................................................................... 27
                                            7.6.3    Deal Analysis ........................................................................................................... 27
                                            7.6.4    Company Profile ...................................................................................................... 27
                                     8   Mergers and Acquisitions in Top Five Markets .......................................................................... 28
                                         8.1    In Vitro Diagnosis ............................................................................................................ 28
                                         8.2    Siemens Medical Acquires Dade Behring ....................................................................... 32
                                            8.2.1    Overview.................................................................................................................. 32
                                            8.2.2    Deal Rationale ......................................................................................................... 32
                                            8.2.3    Deal Analysis ........................................................................................................... 32
                                            8.2.4    Company Profile ...................................................................................................... 33
                                         8.3    Roche Acquires Ventana Medical Systems .................................................................... 33
                                            8.3.1    Overview.................................................................................................................. 33


Investment and Acquisitions Trends in Medical Equipment                                                                               GBIME0023MR /Published MAR 2011
Market 2011
                                                                                                                                                                                Page 4
                                                                                         © GBI Research. This is a licensed product and is not to be photocopied
                                           8.3.2    Deal Rationale ......................................................................................................... 33
                                           8.3.3    Deal Analysis ........................................................................................................... 33
                                           8.3.4    Company Profile ...................................................................................................... 34
                                        8.4    Siemens Medical Acquires Diagnostic Products Corporation ......................................... 34
                                           8.4.1    Overview.................................................................................................................. 34
                                           8.4.2    Deal Rationale ......................................................................................................... 34
                                           8.4.3    Deal Analysis ........................................................................................................... 34
                                           8.4.4    Company Profile ...................................................................................................... 35
                                        8.5    Inverness Medical Acquires Biosite ................................................................................ 35
                                           8.5.1    Overview.................................................................................................................. 35
                                           8.5.2    Deal Rationale ......................................................................................................... 35
                                           8.5.3    Deal Analysis ........................................................................................................... 35
                                           8.5.4    Company Profile ...................................................................................................... 36
                                        8.6    Orthopedic ...................................................................................................................... 37
                                        8.7    Medtronic Acquires Kyphon ............................................................................................ 41
                                           8.7.1    Overview.................................................................................................................. 41
                                           8.7.2    Deal Rationale ......................................................................................................... 41
                                           8.7.3    Deal Analysis ........................................................................................................... 41
                                           8.7.4    Company Profile ...................................................................................................... 42
                                        8.8    Reable Therapeutics Acquires DJO ................................................................................ 42
                                           8.8.1    Overview.................................................................................................................. 42
                                           8.8.2    Deal Rationale ......................................................................................................... 42
                                           8.8.3    Deal Analysis ........................................................................................................... 43
                                           8.8.4    Company Profile ...................................................................................................... 43
                                        8.9    Smith & Nephew Acquires Plus Orthopedics Holding ..................................................... 43
                                           8.9.1    Overview.................................................................................................................. 43
                                           8.9.2    Deal Rationale ......................................................................................................... 43
                                           8.9.3    Deal Analysis ........................................................................................................... 44
                                           8.9.4    Company Profile ...................................................................................................... 44
                                        8.10 Zimmer Holdings Acquired Abbott Spine from Abbott Laboratories ................................ 44
                                           8.10.1 Overview.................................................................................................................. 44
                                           8.10.2 Deal Rationale ......................................................................................................... 44
                                           8.10.3 Deal Analysis ........................................................................................................... 45
                                           8.10.4 Company Profile ...................................................................................................... 46
                                        8.11 Cardiovascular ................................................................................................................ 47
                                           8.11.1 Market Drivers ......................................................................................................... 48
                                        8.12 Boston Scientific Acquires Guidant ................................................................................. 50
                                           8.12.1 Overview.................................................................................................................. 50
                                           8.12.2 Deal Rationale ......................................................................................................... 50
                                           8.12.3 Deal Analysis ........................................................................................................... 51
                                           8.12.4 Company Profile ...................................................................................................... 52
                                        8.13 Teleflex Acquires Arrow International.............................................................................. 52
                                           8.13.1 Overview.................................................................................................................. 52
                                           8.13.2 Deal Rationale ......................................................................................................... 52
                                           8.13.3 Deal Analysis ........................................................................................................... 53
                                           8.13.4 Company Profile ...................................................................................................... 53
                                        8.14 Cardinal Health Acquires VIASYS Healthcare ................................................................ 54
                                           8.14.1 Overview.................................................................................................................. 54
                                           8.14.2 Deal Rationale ......................................................................................................... 54
                                           8.14.3 Deal Analysis ........................................................................................................... 54
                                           8.14.4 Company Profile ...................................................................................................... 54
                                        8.15 Ophthalmic ...................................................................................................................... 55
                                           8.15.1 Market Drivers ......................................................................................................... 56
                                        8.16 Abbott Laboratories Acquires Advanced Medical Optics................................................. 57
                                           8.16.1 Overview.................................................................................................................. 57

Investment and Acquisitions Trends in Medical Equipment                                                                          GBIME0023MR /Published MAR 2011
Market 2011
                                                                                                                                                                         Page 5
                                                                                      © GBI Research. This is a licensed product and is not to be photocopied
                                          8.16.2 Deal Rationale ......................................................................................................... 57
                                          8.16.3 Deal Analysis ........................................................................................................... 58
                                          8.16.4 Company Profile ...................................................................................................... 59
                                       8.17 Luxottica Group Acquires Oakley.................................................................................... 59
                                          8.17.1 Overview................................................................................
				
DOCUMENT INFO
Description: Investment and Acquisitions Trends in Medical Equipment Market 2011 Summary GBI Research’s new report, “Investment and Acquisitions Trends in Medical Equipment Market 2011” provides key data, information and analysis on the investments, mergers and acquistions taking place in the Medical Equipment industry. The report provides information on the current trends in investment and acquiistion affecting the medical equipment industry. The report also includes affects on the market, competiton and market information due to the major mergers and acquisitions in the global medical equipment industry.The report provides comprehensive information on the target as well as information on the acquiring companies.This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts. Scope - Key geographies covered include the US, Canada, the UK, Germany, France, Italy, Spain, Japan, China, India, Australia, and Brazil. - Qualitative analysis of key market trends, major mergers and acquisitions that have taken place and their affect on competition. - The report also covers information on the leading market players and competitive landscape. Reasons to buy - Develop business strategies by understanding the trends and developments that are driving the Investment and Acquisition Trends in Medical Equipment. - Design and develop your product development, marketing and sales strategies. - Exploit M&A opportunities by identifying market players with the most innovative pipeline. - Develop market-entry and market expansion strategies. - Identify key players best positioned to take advantage of the emerging market opportunities. - Exploit in-licensing and out-licensing opportunities by identifying products, most likely to ensure a robust return. - What’s the next being thing in the Investment and Acquisition Trends in Medical Equipment? – Identify, under
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GBI Research is a market-leading provider of business intelligence reports. GBI Research covers worldwide markets and issues, supplies actionable data and forecasts and is driven by industry leaders’ insights. GBI Research provides a broad spectrum of reports across the healthcare and energy industries and its online offering is easy to navigate - a comprehensive resource for business information needs. Headquartered in the UK, the company has branches in the US and Asia, and provides world class client support and service.