There’s been a flurry of merger & acquisition activity in the medical device industry recently, ranging from Kimberly-Clark’s (NYSE:KMB) buyout of Life-Tech’s anesthesia business to Thermo Fisher’s (NYSE:TMO) multi-billion-dollar pursuit of genetic test maker Life Technologies Corp.
The movement also includes some scaling down, with Cardiac Science and InSite Vision (OTC:INSV) both agreeing to divest assets.
The spate of M&A deals could be a carry-over from the strong merger & acquisition figures the medtech industry posted last year. Although a PricewaterhouseCoopers analysis showed fewer deals overall in 2012, the value of those deals grew significantly – albeit driven by Johnson & Johnson‘s (NYSE:JNJ) blockbuster buyout of Synthes.
J&J paid some $21.3 billion last July for Synthes, the Swiss maker of orthopedic and trauma devices. That helped fuel an increase in total deal value from $24.6 billion to $36.4 billion even with 2 fewer transactions, according to PwC’s analysts.
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The analysts also forecast that trend to continue into 2013.
"With the implementation of the Patient Protection & Affordable Care Act in the United States and its sweeping reforms reshaping business models, we expect M&A activity to increase across segments in 2013," they noted.
Recent events have seemed to bear out that thesis:
Kimberly-Clark grabs Life-Tech’s anesthesia biz
Kimberly-Clark said it acquired Life-Tech Inc.’s anesthesia business for an undisclosed amount. KMB is picking up Life-Tech’s needles, catheters and accessories for peripheral nerve block procedures. The Dallas-based company said it plans to fold the LifeTech PNB assets into its K-C Health Care ON-Q line.
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Report: Thermo-Fisher leads the pack in race for Life Technologies
Thermo Fisher (NYSE:TMO) is leading the pack in the race to acquire Life Technologies Corp. (NSDQ:LIFE) and could bid as much as $12 billion for the genetic test maker, according to Reuters, which cited "3 people familiar with the matter." That works out to a bid of between $65 and $70 per share for Life Technologies.
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Cardiac Science to ditch cardiology Dx biz
Cardiac Science, which is owned by Opko Group (NYSE:OPK), said it’s agreed to sell its diagnostic cardiology business to Mortara Instrument, including the Burdick and Quinton brands but excluding the MySense ECG recorder or its automated external defibrillator business. Terms of the deal were not disclosed.
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InSite Vision to reap $16M from Besivance royalties deal
InSite Vision (OTC:INSV) said it agreed to sell its royalties on future sales of its Besivance conjunctivitis treatment to a subsidiary of SWK Holdings Corp. (OTC:SWKH) and Bess Royalty for up to $16 million.
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Analysts’ ups and downs
- Amgen (NSDQ:AMGN): Oppenheimer raises price target to $100, "perform" rating.
- Boston Scientific (NYSE:BSX): Credit Suisse downgrades from "outperform" to "neutral" rating, reiterates $8.50 price target.
- Edwards Lifesciences (NYSE:EW): Goldman Sachs lowers price target from $112 to $106.
- Smith & Nephew (FTSE:SN, NYSE:SNN): BNP Paribas reiterates “outperform” rating.
- Teleflex (NYSE:TFX): Sidoti downgrades from “buy” to “neutral” rating.
