Last year was the year of the megamerger, a trend that many believe will continue through to this year.

But a new report finds that very large mergers and acquisitions rarely create value in the medical device industry. The opposite is true of pharmaceutical deals.

The report from management consulting firm McKinsey entitled "Value Creation in Medical Device M&A" evaluated 396 deals over a 15-year period between1999 to 2014, including a deeper dive into 22 deals that were worth $750 million or more. The analysis found that compared with pharmaceutical deals, large medical device deals are neutral when it comes to total returns to shareholders. Further, stock multiples "decrease 13% following a large deal, representing lower growth expectations for the combined company."

The story does not get any sunnier for operating margins that do not grow noticeably. In fact "economic profit in aggregate shrinks in these transactions," according to the report.

Contrast that with the value created through pharma deals (the second bar chart is in dollars). 

"Pharmaceutical acquirers have managed to deliver approximately three times the margin improvement and multiple billions of dollars more in economic profit than medical device acquirers," wrote report co-authors Myoung Cha, principal; Josh Kopp, engagement manager; and Gerti Pellumbi, principal.

As the industry is in the throes of a new wave of consolidation, the report recommends thinking very carefully about doing deals. The best strategy in terms of mergers and acquisitions is what the management consultant company describes as a "programmatic" M&A strategy. 

Put simply, programmatic acquirers do small deals every few years. 

"Looking at the longer-term performance of M&A programs, we find that smaller and higher-frequency M&A programs deliver better shareholder returns than other deal programs, including big deals," the report said. "With another wave of consolidation ahead for the medical device industry, we believe large deals have a role, but they should be carefully considered in the context of a programmatic M&A strategy.