Look out for Medtronic, the world’s largest medical device company, stepping up its tuck-in M&A.
That was one of the major takeaways from Medtronic’s Jan. 13 presentation at the annual J.P. Morgan Healthcare Conference in San Francisco.
“We’ve got significant firepower with the balance sheet that we’ve got today to be able to carry out a meaningful number of meaningful acquisitions without any problem, and the dividend is not getting in the way of that,” said Medtronic CFO Thierry Piéton.
Examining tuck-in M&A opportunities was one of the goals of a Medtronic board of directors growth committee formed over the summer. Along with an operating committee, it was one of two new board committees that emerged from the company management’s decision to work with activist investor Elliott Investment Management to boost the Minnesota-run medtech’s value.
“I think clearly what’s changing, versus the last few years, is coming back to doing more M&A,” Piéton said. “I think we went through a period … around solidifying the operations and improving operations on a day-to-day basis. And now we’re there. So we’ve earned the right to do these acquisitions, and we’ve got the capacity, so we’re going to step up in that area.”
At AdvaMed’s The Medtech Conference in October in San Diego, a top Medtronic executive involved in mergers and acquisitions hinted that larger, more publicly announced deals were on the way.
“We look at how we shrink to grow and look at where we have a right to win in those markets,” said Medtronic VP and Global Head of Corporate and Business Development, M&A and Venture, Chris Eso. “Where do we have a competitive advantage and core competencies? We’re looking across our whole portfolio for where we should be making strategic investments and strategic bets to drive the biggest long-term impact from both a patient care and a revenue perspective.”
Over the past year, MassDevice covered only one tuck-in acquisition involving Medtronic: the purchase of nanosurface technology assets and certain IP rights from Nanovis to support the development of next-generation PEEK interbody fusion devices. Meanwhile, our site covered five M&A deals (Valencia Technologies, Nalu Medical, Elutia bioenvelope technologies, SoniVie, Bolt Medical) involving competitor Boston Scientific.
When it came to big M&A deals, Medtronic wasn’t to be found.
At least when it comes to tuck-in acquisitions, though, the situation appears set to change.
Said CEO Geoff Martha at J.P Morgan: “I think as we’re leaning into play to tuck in M&A and playing offense there, this is helping a lot.”
More on Medical Design & Outsourcing: Medtronic tech takeaways on PFA, RDN, M&A and R&D from top executives
