Creganna Medical's volume manufacturing specializes in minimally invasive delivery and access devices. (Image courtesy of Creganna Medical)
TE Connectivity executives say the purchase of Creganna Medical will broaden their platform of implantable device design and manufacturing capabilities.
Consolidation continues in the medtech industry, with sensor and connectivity company TE Connectivity announcing it will buy minimally invasive contract device maker Creganna Medical for $895 million.
Headquartered in Switzerland but run from Berwyn, PA, TE will use the purchase to expand on its AdvancedCath acquisition, announced nearly a year ago, company CEO Tom Lynch said in a statement. (Download our free report: Medtech Mergers & Acquisitions of 2015)
Lynch also said the acquisition will broaden TE's "harsh environment" (i.e. the human body) platform. Creganna will add six plants and about 225 product development engineers to TE, more than doubling the number dedicated to TE's medical device segment. TE has 7000 engineers and factories in the Americas, Europe and Asia.
"The combined team will bring significant engineering expertise and industry depth to create highly engineered solutions for OEMs globally," Lynch said.
Ireland-based Creganna specializes in minimally invasive cardiovascular, neurovascular and other life-saving treatments and procedures. Creganna reported sales of approximately $250 million in 2015, and is a portfolio company of Permira Funds.
The companies expect the transaction to close in the third quarter of 2016.
Many of the factors that propelled medtech's M&A activity in 2015 are present at the beginning of 2016. February kicked off with a trio of significant M&As being announced by Abbott, Stryker, and Medtronic.
Abbott Laboratories intends to acquire the diagnostic firm Alere (Waltham, MA) for $5.8 billion, a move that would bolster Abbott's point-of-care diagnostic business and give it projected total diagnostic sales of $7 billion annually. Alere makes diagnostics for a variety of infectious diseases, including HIV, dengue fever, tuberculosis, and malaria.
The day after the Abbott-Alere deal was announced, news came out that Abbott will also acquire steerable sheath company Kalila Medical (Campbell, CA) for an undisclosed sum.
Stryker plans to acquire Cary, IL-based Sage Products, which manufactures a host of products meant to prevent so-called "never events" in ICUs and hospitals, including hospital-acquired infections. The all-cash transaction is valued at $2.775 billion.
Medtronic is expanding its diabetes technology business with the purchase of privately held Bellco (Mirandola, Italy). Bellco makes dialyzers and chronic and acute dialysis machines. Terms of this deal were not disclosed.
One of the biggest factorsdriving M&As this year and last is the dwindling margins of U.S. hospitals, which are leading many hospital administrators to look for cost savings from medical device companies. This environment favors bigger entities that can leverage economies of scale.
Visit Creganna Medical (Booth #2449) and TE Connectivity (Booths #617 and #2377) at MD&M West, February 9-11 at the Anaheim Convention Center in Anaheim, CA.
Nancy Crotti is a contributor to Qmed and MPMN.
Like what you're reading? Subscribe to our daily e-newsletter.