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Medical device sector ripe for deal-making
Colleagues,
As reported in Reuters UK... Large medical device makers armed with cash hoards and seeking ways to grow are stepping up acquisitions of young companies with promising technology pipelines but scarce capital. The past few weeks have seen a burst of deals, most recently Monday's announcement by Medtronic Inc (MDT.N) that it plans to buy two privately held, replacement heart valve developers for more than $1 billion.
And analysts expect more deals this year amid the urgency on the part of maturing medical device makers to find new engines for long-term growth. "There are opportunities out there, and we're going to see this continue throughout 2009," said BMO Capital Markets analyst Joanne Wuensch, who expects Medtronic, with $1.75 billion in cash and short-term investments on its balance sheet, to continue shopping.
"Medtech stocks have outperformed, so these companies still have a currency," Wuensch said. "A lot are in hunker-down mode, but they are not in crisis mode." Meanwhile, small development-stage companies are running up against the challenge of raising capital at a time when credit markets have seized up.
Besides cash flow, the big diversified healthcare companies have the regulatory and legal muscle and huge global infrastructures needed to bring new medical devices to market, and the patience to await a return on their investment. "The small guy is just the opposite -- they have the idea but need the capital," said Wise, who expects Johnson & Johnson (JNJ.N), St. Jude Medical Inc (STJ.N), Abbott Laboratories (ABT.N), Stryker Corp (SYK.N), Covidien Ltd (COV.N), and Baxter International Inc (BAX.N) to be buyers.
Wuensch named ArthroCare Corp (ARTC.PK), AtriCure Inc (ATRC.O), Cooper Cos Inc (COO.N), Masimo Corp (MASI.O), NuVasive Inc (NUVA.O), ResMed Inc (RMD.N), Staar Surgical Co (STAA.O) and even St. Jude Medical among device makers that could be takeout targets.
Read on at: http://medtechiq.ning.com/group/medicalangelsvcs/forum/topic/new?ta...
ENJOY!
CC
As reported in Reuters UK... Large medical device makers armed with cash hoards and seeking ways to grow are stepping up acquisitions of young companies with promising technology pipelines but scarce capital. The past few weeks have seen a burst of deals, most recently Monday's announcement by Medtronic Inc (MDT.N) that it plans to buy two privately held, replacement heart valve developers for more than $1 billion.
And analysts expect more deals this year amid the urgency on the part of maturing medical device makers to find new engines for long-term growth. "There are opportunities out there, and we're going to see this continue throughout 2009," said BMO Capital Markets analyst Joanne Wuensch, who expects Medtronic, with $1.75 billion in cash and short-term investments on its balance sheet, to continue shopping.
"Medtech stocks have outperformed, so these companies still have a currency," Wuensch said. "A lot are in hunker-down mode, but they are not in crisis mode." Meanwhile, small development-stage companies are running up against the challenge of raising capital at a time when credit markets have seized up.
Besides cash flow, the big diversified healthcare companies have the regulatory and legal muscle and huge global infrastructures needed to bring new medical devices to market, and the patience to await a return on their investment. "The small guy is just the opposite -- they have the idea but need the capital," said Wise, who expects Johnson & Johnson (JNJ.N), St. Jude Medical Inc (STJ.N), Abbott Laboratories (ABT.N), Stryker Corp (SYK.N), Covidien Ltd (COV.N), and Baxter International Inc (BAX.N) to be buyers.
Wuensch named ArthroCare Corp (ARTC.PK), AtriCure Inc (ATRC.O), Cooper Cos Inc (COO.N), Masimo Corp (MASI.O), NuVasive Inc (NUVA.O), ResMed Inc (RMD.N), Staar Surgical Co (STAA.O) and even St. Jude Medical among device makers that could be takeout targets.
Read on at: http://medtechiq.ning.com/group/medicalangelsvcs/forum/topic/new?ta...
ENJOY!
CC
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