Mega mergers / Mega acquisitions speculation doesn’t seem to catch a break

M&A

Mega mergers seem to have caught up a great amount of traction in medtech arena.

Why so?

For obvious reason they help focus the operations and devise strategy specific to individual domains or sectors. Royal Philips , Dutch giant, is one such company which is on quest for mega mergers and is also open to closing small deals, provided it complements their current business focus. Company has hired BOFA to accomplish the task of scouting players that could ideally fit in their future growth plans.

Details about the Philips future plans and acquisition hunger were quoted in Bloomberg story, and have no confirmation from any sources as of now.

The news recently caught up attention as medtech journals acknowledged and published the story, going by the assumption that a company that shelled out USD 1.2 billion for Volcano could have some more appetite for acquisitions left.

M&A strategy of company basically complements its vision of standalone Healthcare business growth, growth which is greatly complemented by US market, a geography that drives more than 45% of global medtech sales. It also stands in alignment with their future move of hosting light biz IPO that would leave its divisions operate in silos. The structure hence left, would eventually require backing from acquisitions, and what could be ideal sector other than healthcare for such a venture.

According to certain sources potential fit for the mergers are Elekta, Varian Medical, two of the companies who share the business overlap & synergy with Philips current focus.

Medtech behemoths are all boarding on acquisition wagon sooner or later. This spree is rampant lately, mainly because of the convergence opportunities that consumer care products and healthcare platforms offer.

To back the above statement we have some lines from Philips CEO which stands testimonial to the fact that there is greater need for medtech OEMs to undergo following steps:

-separation

-focus

-acquire

– merge

– & restructure

“We are convinced that separation is the right next step on the journey to set up Philips well for the future.” He added, “We see professional health care and consumer markets converging into a single health continuum, enabled by connected health technology. With our combined Health Care and Consumer Lifestyle portfolios we will be able to capture opportunities from healthy living and prevention, to diagnosis, treatment, recovery and home care by addressing integrally the needs of consumers, patients and health care professionals.”

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