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The Majority of Mergers and Acquisitions That Took Place from 2006 to 2009 were of a Deal Value Less than $25m/n

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Investment and acquisitions trends in medical equipment market 2011 l.jpg

Investment and Acquisitions Trends in Medical Equipment Market 2011


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The Majority of Mergers and Acquisitions That Took Place from 2006 to 2009 were of a Deal Value Less than $25m

The medical equipment market offers strong growth prospects and is highly regulated and driven by constant technological innovation. The three largest markets for medical equipment are the US, the EU and Japan. The majority of mergers and acquisitions that took place from 2006-2009 were of a deal value less than $25m. Big companies operating in the fields of in vitro diagnostics, orthopedics and cardiology are looking for acquisitions to enhance their growth prospects and diversify their portfolio. More than 74% of the deals were less than $25m in size from 2006 to 2009, indicating that the medical equipment industry is highly fragmented and the need for new technological innovation is huge. The potential exit value of various start-up firms is less than $25m. The market is highly fragmented, with many small players with annual revenue less than $5m. Small innovative firms are associated with developing new medical technology products. Most of these organizations specialize in only one technology and much redundancy exists between companies. Start-up firms in medical equipment companies are groomed by investors, so that they can be acquired by larger companies. Small firms, after receiving US FDA marketing approval for their products, are targeted for acquisition by large medical equipment companies. There exists an advantage for both small and large firms. Small firms benefit from added resources, while large firms gain from


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advanced technologies. Therefore all these factors and the fiscal pressure of staying afloat are compelling many smaller firms to merge with larger ones.

For further details, please click or add the below link to your browser:

http://www.gbiresearch.com/Report.aspx?ID=Investment-and-Acquisitions-Trends-in-Medical-Equipment-Market-2011&ReportType=Industry_Report&Title=Medical_Devices

Pharmaceutical Companies are Diversifying Their Portfolio by Acquiring Medical Equipment Companies

Currently, pharmaceutical companies are diversifying their portfolios by acquiring medical equipment companies. Although pharmaceutical companies have been generating huge revenues, intense competition is seen in the pharmaceutical industry due to patent expiries and rising R&D costs. Pharmaceutical companies in the US and Europe are experiencing increasingly aggressive patent litigation, shortening the time of patent protection and accelerating the entry of generic versions. Even legislators are in favor of this approach, considering generics as a means to reduce the budgets for drug therapies. Therefore, pharmaceutical companies are diversifying into medical equipment companies, and the industry has witnessed mega deals. The pharmaceutical companies are trying to diversify their portfolios in high profit


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sectors by acquiring medical equipment companies. Moreover, medical equipment products have shorter product development time, which provides opportunity for pharmaceutical companies trying to cope with the pressures of declining bottom lines.

The most significant deal was the acquisition of Alcon by Novartis in 2010, for a purchase consideration of approximately $28.1 billion. The acquisition has strengthened Novartis’ presence in the growing eye care sector market. The eye care sector provides a strong growth platform to Novartis, with excellent fit for their focused healthcare portfolio. Novartis has a huge opportunity for growth as 65 million people worldwide are suffering from glaucoma, and 22 million people are suffering from age-related macular degeneration. This provides huge opportunity for Novartis in the growing eye care sector. In 2009, Abbott acquired Advanced Medical Optics (AMO) for $2.8 billion to add ophthalmic device products to its existing pharmaceutical and diagnostics portfolio.

In Vitro Diagnostic Companies Consolidating their Immuno-Chemistry Portfolio

The immuno-chemistry devices market is one of the largest segments in the in vitro diagnostic devices market, and major companies have begun concentrating on this market. The immuno-chemistry devices market was estimated to be


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worth $13.9 billion in 2009 and is expected to grow at a rate of 5.8% annually. The market for treating major infectious diseases such as oncology, cardiovascular testing, HIV and the hepatitis B and C viruses (HBV and HCV) is being driven by the technological advancements in tissue staining and biopsy in cancer detection. Pharmacogenomics and the need for personalized testing to determine drug response will also drive the immuno-chemistry market in the future. There is high potential for profitability in this market, leading to M&As such as Siemens Medical acquiring Dade Behring for a purchase consideration of approximately $7 billion, to expand its product base in the immuno-chemistry segment as well as creating the first integrated diagnostic company. Inverness Medical Innovations acquired Standard Diagnostics for $205m, to enhance its immuno-chemistry devices portfolio and expand its product portfolio into rapid test kits, urine analyzing systems, enzyme-linked immunosorbent assay (ELISA) kits and medicine materials. The rapid test kits are found to be useful in various infectious diseases, such as sexually transmitted diseases, dengue fever, blood borne diseases, respiratory diseases and febrile diseases. Also, these rapid test kits are used for the diseases associated with fertility hormones, cancer markers, drug abuse and forensic tests.


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The US is the Biggest Market for Mergers and Acquisitions in Medical Equipment in 2009

The US is one of the biggest markets for Mergers and Acquisitions (M&A) in medical equipment. In the last four year period from 2006-2009, the targets in medical equipment mergers and acquisitions were concentrated heavily in the US, Canada, Europe and Asia-Pacific. The US is the most attractive venue for M&A in the global medical equipment industry due to higher concentration of companies with key products and technologies in development stage. Ongoing cost containment pressures, the need to stay on the cutting edge of technology, and the need for market diversification are expected to further strengthen the ongoing consolidation in the market. In 2010, the deals that took place were Boston Scientific completing acquisition of Asthmatx, Cardinal Health acquiring Carefusion, Royal Philips Electronics acquiring Burton Medical Products, Medtronic completing acquisition of Osteotech, Johnson & Johnson completing acquisition of Micrus Endovascular, and Covidien completing acquisition of ev3.

GBI Research’s report, “Investment and Acquisitions Trends in Medical Equipment Market 2011”, provides key data, information and deals analysis that took place from 2006-2009 in the global medical equipment market. The report provides key data on M&A deals by type, M&A deals by value range and M&A by geography in the medical equipment market. The report provides in-depth


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analysis on the M&A in the top five medical equipment categories – In Vitro Diagnostics, Cardiovascular Devices, Orthopedic Devices, Ophthalmic Devices and Drug Delivery Devices, and market drivers for these categories. The report also mentions M&A key deals in 2010 with detailed analysis. The report analyzes Mergers and Acquisition opportunities and risk evaluation for the top five medical equipment categories. This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.

For further details, please click or add the below link to your browser:

http://www.gbiresearch.com/Report.aspx?ID=Investment-and-Acquisitions-Trends-in-Medical-Equipment-Market-2011&ReportType=Industry_Report&Title=Medical_Devices

Visit our report store: http://www.gbiresearch.com

For more details contact:

pressreleases@gbiresearch.com

North America: +1 646 395 5477

Europe: +44 207 753 4299

+44 1204 543 533

Asia Pacific: +91 40 6616 6782


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