Preparing for Mergers and Acquisitions 3556

Originally Published MX March/April 2004

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Large medtech companies may be eager for corporate matrimony, but buyers and sellers still have a lot to consider before tying the knot.

Steve Halasey

For the past few years, the anemic condition of the global economy and correspondingly weak public equity markets have combined to restrain investment in medical technology companies. For many medtech companies seeking to pay off investors, the only viable exit strategy has been to seek out a merger or agree to be acquired—and hope that favorable terms could be found.

Today, with the U.S. economy seemingly on its way to recovery, the pace of mergers and acquisitions among medtech companies is showing signs of even greater favor. Large-company acquirers are actively on the lookout for emerging companies whose technologies could represent a breakthrough or key product-line extension. Meanwhile target companies are eagerly grooming themselves for sale at a valuation that might finally provide their early-stage investors with a reasonable return on investment.