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July Was Merger Month for Device Industry
September 1, 2007
2 Min Read
It used to be that multi-billion-dollar deals in the device industry were rare. But now, they happen all the time. July was a particularly active month.
Why the increased activity? Some on Wall Street believe that the Boston Scientific–Guidant deal convinced the industry that almost no company is too big to be acquired. That's something that employees at device firms need to remember.
Just in July:
In a move that would unite two players from opposite ends of the diagnostics sector, Siemens agreed to purchase Dade Behring for $7 billion. Siemens is known for high-tech imaging, Dade Behring for clinical laboratory testing equipment. Siemens said its goal is to become the global leader in full-service diagnostics. Shareholders apparently thought the price was too high, since Siemens shares dropped in value after the Dade Behring acquisition was announced.
Medtronic announced it would buy Kyphon Inc. (Sunnyvale, CA), a firm that develops minimally invasive spine treatments, for $3.9 billion. The deal will allow Medtronic to expand its portfolio with products geared toward older patients. Interestingly, Medtronic has an intellectual-property lawsuit pending against Kyphon. That lawsuit will be dropped upon completion of the acquisition.
Multi-industry conglomerate Teleflex Inc. (Limerick, PA) said it would buy Arrow International Ltd. (Reading, PA) for $2 billion. Arrow makes catheter-based devices for cardiac and critical care. Teleflex owns a variety of device interests and has gone on a huge acquisition binge in 2007.
EV3 Inc. (Plymouth, MA) and FoxHollow Technologies (Redwood City, CA) announced a $780 million merger. Both make endovascular devices, and both have won praise on Wall Street for their innovation and strong operations. Not surprisingly, shares of both firms soared after the deal was made public. The company's combined product portfolio will include atherectomy and thrombectomy devices, PTA balloons, stents, embolic protection devices, infusion catheters and wires, embolic coils and liquid embolics.
July did bring one unconsummated merger as well. GE Healthcare, after doing due diligence, announced that it was calling off its purchase of Abbott's diagnostics business, for which it would have spent $8 billion.
Copyright ©2007 Medical Device & Diagnostic Industry
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