It looks like Cook Medical is shedding its reproductive health business. San Ramon, CA-based CooperCompanies said it signed a binding letter of intent to acquire the business for about $875 million.
The reproductive health business brought in revenue of $158 million in 2021, which is up roughly 17% year-over-year in constant currency. The business is a manufacturer of minimally invasive medical devices focused on the fertility, obstetrics, and gynecology markets.
Cook said it has had a focus on reproductive health for more than 40 years.
“Our history with reproductive health has been full of innovations to help patients fulfill their dreams of having a family,” said D.J. Sirota, senior vice president of Cook Medical’s MedSurg specialty. “This agreement represents more than a simple transaction; it is a commitment to offer a more complete range of solutions to customers and patients around the world. CooperSurgical is uniquely positioned to combine Cook’s reproductive health portfolio with their resources and plans to significantly invest in this product portfolio.”
Cook noted that once the transaction closed it will continue to manufacture products for CooperSurgical during a two-year transition period and will increase manufacturing capacity to keep up with growth.
Cook said that no manufacturing jobs are at risk because of this partnership and employees in manufacturing who support these products will continue to do so during the transition period and eventually will cross-train to manufacture other Cook Medical products.
“This acquisition is an excellent strategic fit for CooperSurgical.” said Al White, CooperCompanies President and CEO. “We’re improving our international fertility footprint, especially within the Asia-Pacific region, and adding highly synergistic and respected labor and delivery devices to our ObGyn portfolio.”
Divestitures could be a hot trend in medtech in the near future. John Babitt, a Life Sciences Partner at EY, addressed the prospect of companies shedding off components during episode 31 of Let’s Talk Medtech.
“Yes, I, I think we're going to continue to see, a large level of divestiture [in medtech],” Babitt said in the podcast interview.
Babitt noted that in addition to divestitures – spinouts were going to be a big trend too.
“I think one of the themes that we're hearing is that the spin is in,” Babitt said during the podcast. Zimmer [Biomet] has announced that they're going to be spinning the spine and dental business out. Becton Dickinson has announced that they're going to be spinning their diabetes business out. These are going to be new public entities with their own sources of capital and their own M&A strategies.”