DuPont to Acquire Spectrum Plastics Group
DuPont announced on May 2, 2023 its acquisition of Spectrum Plastics Group (“Spectrum”), a specialty plastics manufacturer, from the private equity firm AEA Investors for $1.75 billion.
Headquartered in Atlanta, GA, Spectrum was formed in 2017 via a merger of Pexco LLC and PPC Industries (including its Kelpac Medical subsidiary) as a portfolio company of the private equity firm Kohlberg & Company LLC. In 2018, AEA Investors’ Middle Market Private Equity team bought Spectrum from Kohlberg & Company, LLC. According to DuPont’s press release, Spectrum’s clients include 22 of the world’s 26 top medical device original equipment manufacturers (“OEM”). The industry served by these OEMs includes thriving medical sectors such as structural heart, electrophysiology, surgical robotics, and cardiovascular.
DuPont has a robust portfolio that already includes a medical device and biopharma consumables business and a healthcare packaging business, such as its Liveo™ silicone solutions business and Tyvek® Medical Packaging. Ed Breen, Executive Chairman and Chief Executive Officer of DuPont stated, when announcing the acquisition of Spectrum:
We have been focused on Spectrum for a long time and our team is extremely excited for this opportunity. Spectrum is a compelling strategic complement to our existing healthcare portfolio, which already includes businesses with best-in-class innovation, deep customer relationships and with strong growth and profitability. with this combination, we’ll be able to offer customers additional innovation and manufacturing capabilities with a broader and more integrated solution set.
According to DuPont’s press release, the deal is expected to close by Q3 2023 and DuPont plans to pay the purchase price from existing cash balances. DuPont expects the acquisition to bring a double-digit multiple on its 2023 forecast EBITDA and to be immediately accretive to its adjusted earnings per share.
J&J Acquires Abiomed for $16.6 Billion
Johnson & Johnson (“J&J”) announced on November 1, 2022, that it will acquire Abiomed for an upfront payment of $380.00 per share in cash, which equates to about $16.6 billion. The acquisition is expected to be completed in the first quarter of 2023. According to reports, after the acquisition, Abiomed “will operate as a standalone business within J&J within Johnson & Johnson MedTech, becoming one of the company’s dozen ‘priority platforms,’ defined by annual sales of at least $1 billion.”
Joaquin Duato, Chief Executive Officer of Johnson & Johnson, stated that “[t]he addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” and he further stated the acquisition will continue to enhance J&J’s “position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.” The acquisition follows reports earlier this year that J&J intended to “get active on the medtech M&A front.”
Abiomed was founded in 1981 “for the purpose of developing the world’s first artificial heart. ” Abiomed currently makes the Impella heart pump, which is “a support system of percutaneous catheter-based technology offering hemodynamic support to the heart.” Abiomed also offers the Breathe OXY-1 System, which is a “cardiopulmonary support system with an integrated oxygen concentrator.” Last year, Abiomed acquired the start-up preCARDIA and its catheter technology. Recently, “Abiomed reported revenue of $266 million, up 7% and up 11% in constant currency year over year, the seventh consecutive quarter the company posted double-digit revenue growth in constant currency.”
The press release may be accessed here.
Cambridge Cognition Acquires eClinicalHealth, Targets Improved Virtual Clinical Trial Offerings
Cambridge Cognition Holdings PLC announced on October 12, 2022 that it acquired eClinicalHealth Ltd. (eCH) for about $1.9 million. eCH offers the Clinpal platform, which facilitates virtual clinical studies. Per the announcement, Cambridge Cognition acquired eCH to “enhance” Cambridge Cognition’s capabilities within the virtual clinical study space. According to Cambridge Cognition, the addition of eCH allows coverage of “all modules from recruitment through to clinical reporting.”
Founded in 2012, eCH is a digital technology provider. eCH’s Clinpal is an end-to-end clinical study platform. Clinpal allows researchers to configure a study, market to and recruit potential study patients, gather data from enrolled patients, and store and access study data. According to eCH, several studies involving a “top 10 pharma” company have already used Clinpal.
Cambridge Cognition is a tech company that develops digital solutions for clinical cognitive studies. More specifically, the company offers several different digital platforms intended for use at various stages of a clinical study, such as patient recruitment, study design, and data analysis. According to Cambridge Cognition, virtual clinical study is suitable for many different central nervous system disorders—for example, depression or Alzheimer’s disease. Such studies can run regular cognitive assessments at home. In this vein, Cambridge Cognition’s CANTAB platform enables remote assessment. CANTAB can administer cognitive tests to a patient via a mobile device.
Zooming out, the expansion of the virtual clinical trial market may have been accelerated by the COVID-19 pandemic. As of 2022, 89% of clinical study sponsors use decentralized technologies and methods in their studies.
Boston Scientific Acquires Embolization Gel Developer Obsidio, Inc.
Boston Scientific announced on August 15, 2022, that it acquired Obsidio, Inc. for an undisclosed fee. Obsidio has technology called the Gel Embolic Material (GEM™), which is used in minimally invasive blood vessel embolization. According to its press release, Boston Scientific intends to expand its interventional oncology and embolization portfolios.
An embolization treatment procedure uses a material to obstruct or reduce blood flow through a blood vessel. The treatment may be used to stop hemorrhaging, to stabilize blood vessel malformations, or to reduce blood flow to tumors, which are often highly vascularized.
Founded in 2019, Obsidio initially sought to commercialize technology relating to NIH-funded research on hemorrhage control and aneurysm treatment. Obsidio subsequently obtained FDA approval for GEM™ on July 1, 2022, claiming equivalence to Biosphere Medical’s EmboCube™ Embolization Gelatin. According to Obsidio, GEM™ is a semi-solid made up of bioresorbable gelatin, layered silicate, and tantalum powder. The material is delivered to a target vessel via catheter. As a semi-solid, the material is supposed to conform to the shape of the target vessel. Additionally, GEM™ is supposed to be shipped in a ready-to-use form, which, according to Boston Scientific, may save some preparation time relative to other embolization materials.
Boston Scientific is a multinational biomedical engineering company. In 2021, Boston Scientific spent over $4 billion across five acquisitions. Obsidio is the second of Boston Scientific’s acquisitions in 2022, the other being a $230 million deal for Synergy Innovation’s majority stake in M.I.Tech, a developer of a conformable, self-expanding metal stent called HANAROSTENT®.
First closing of Acutus’s sale of its left-heart access portfolio to Medtronic completed
On July 1, 2022, Acutus Medical (”Acutus”), an arrhythmia-based medical device company, reported that it completed the first of its two closings in its left-heart access portfolio sale to Medtronic. Acutus, the maker of the AcQCross™ line of sheath-compatible septal crossing devices and systems, first announced this deal in late April 2022, and it includes an upfront $50 million cash payment to Acutus Medical upon the initial closing of the transaction. The sale of Acutus’s portfolio comes after Acutus’s restructuring announcement that resulted in layoffs in early January 2022, and Acutus’s recent FDA clearance of its expanded suite of additional left-heart access products such as AcQCross™ Qx system for use with the TruSeal™ and FXD™ delivery system for the Watchman™ LAAC Device.
Left-atrium access procedures require a multi-step process that often involves the exchange of wires and needles through the septum all while trying to obtain a proper angle and location. “Crossing the septum at the proper location is important when doing any left-sided heart procedure, but it can be especially critical to the success of delivering Watchman to the left atrial appendage,” says Dr. Tom Waggoner. “With AcQCross, I can easily reposition without withdrawing or exchanging needles or wires, so its new compatibility with Watchman has made my procedures much safer for my patients and far more efficient for me and my team.”
As stated in Acutus’s release, “US Left-atrial appendage closure procedures are expected to total over 50,000 in 2022…With this clearance, Acutus now offers sheath-compatible transseptal access devices that cover 409,000 electrophysiology and structural heart procedures in the US.”
It still is not clear when the entire deal between Medtronic and Acutus will be finalized. The final closing details are also tied to another $35 million deal with Deerfield Management Company to refinance Acutus’ existing debt.
Medtronic’s acquisition of the portfolio follows Boston Scientific’s $1.75 billion acquisition of Baylis Medical and its transseptal puncture systems.
Boston Scientific Agrees to Purchase Majority Stake in M.I.Tech as M&A Deals Are Expected to Pick Up
On June 15, 2022, Boston Scientific entered into a definitive agreement to purchase a majority stake in M.I.Tech Co., Ltd, a publicly traded Korean medical device company in the field of endoscopic and urological procedures. The agreement includes a purchase price of approximately $230 million. According to the announcement, M.I.Tech is the creator of the HANAROSTENT® technology, a family of conformable, non-vascular, self-expanding metal stents. Non-vascular stents can be used in gastrointestinal applications and in airways to clear obstructions or constrictions in areas such as the biliary tree, pancreatic duct, esophagus, colon, and duodenum.
Boston Scientific’s Art Butcher, executive vice president and group president, MedSurg and Asia Pacific, stated:
M.I.Tech is an innovator in non-vascular stent development, with product offerings that complement our existing stent portfolio, including the differentiated AXIOS™ Stent and Electrocautery Enhanced Delivery System and the flexible and conformable Agile™ Esophageal Stent System. We are committed to investing in technologies that advance care for patients around the world and are eager to work more closely with M.I.Tech to expand their international footprint.
Under the agreement, Boston Scientific will be purchasing a 64% stake in M.I.Tech from Synergy Innovation Co., Ltd, whose website identifies M.I.Tech as a subsidiary and a top 5 player in global non-vascular stents. M.I.Tech’s website also describes other products such as lithotripter baskets, polypectomy snares, veterinary stents, and glucometers. The transaction is expected to be completed in the second half of 2022.
According to PwC, semi-annualized M&A deal value in the medical device sector is down 85% this year in comparison to the same period in 2021 when $76.4 billion was invested across 93 deals. PwC attributes the slow-down to acquirers shifting their focus to integration and value capture activities, while the sector deals with regulatory headwinds and semiconductor shortages. PwC expects deals to pick up across all pharmaceutical and life science sectors in the second half of 2022, with the medical device sector searching for alternative forms of revenue, particularly from new consumer-centric technologies.
Acquisition of BK Medical Expands GE Healthcare’s Precision Health Presence
GE Healthcare announced on December 21, 2021, that it has completed the $1.45 billion acquisition of BK Medical from Altaris Capital Partners. According to the press release, the acquisition expands GE Healthcare’s $3 billion ultrasound business from diagnostics into surgical and therapeutic interventions and adds to GE Healthcare’s capability in the fast-growing advanced surgical visualization segment. The acquisition further boosts GE Healthcare’s presence within the field of precision health, which refers to the tailoring of treatments to patients based on their medical histories, genetic makeup, and other factors and has a market that is valued in the tens of billions of dollars based on an article published on GE Healthcare’s website.
BK Medical is a global intraoperative imaging and surgical navigation company headquartered in Boston and Copenhagen. Through its ultrasound technology and software algorithms, BK Medical enables surgeons to make real-time, data-based decisions during surgical procedures, including applications in general surgery, neurosurgery and spine, robotic-assisted surgery, colorectal surgery and urology. BK Medical has more than 650 employees and has protected its technology with more than 136 patent families.
When the deal was first announced in September 2021, GE Healthcare’s President and CEO, Kieran Murphy, emphasized:
Ultrasound today forms an integral part of many care pathways, and BK Medical is a strategic and highly complementary addition to our growing and profitable Ultrasound business. This transaction helps GE Healthcare continue to expand beyond diagnostics into surgical and therapeutic interventions, simplifying decision-making for clinicians and equipping them with greater insights to deliver faster, more personalized care for their patients—representing another step toward delivering precision health.
The acquisition of BK Medical is GE Healthcare’s second acquisition in 2021 within the field of precision health. In May 2021, GE Healthcare announced the acquisition of Zionexa, a company headquartered in France that develops and commercializes in-vivo biomarkers for guiding targeted therapies in oncology.
Baxter Completes $10B+ Acquisition of Hillrom
On December 13, Baxter International Inc. (“Baxter”) announced the completion of one of the biggest medtech acquisitions of 2021, acquiring Hillrom (a global medical equipment maker headquartered in Chicago) for a purchase price of ~$10.5 billion. The deal had originally been announced by Baxter in September 2021.
According to a statement on Baxter’s website, “Baxter’s acquisition of Hillrom has formed one of the world’s leading medical technology companies, centered around a shared vision to transform healthcare.”
Baxter’s product portfolio includes diagnostic, critical care, kidney care, nutrition, and surgical products used in hospitals, physician offices, and patient homes. According to Baxter, the addition of Hillrom’s product lines, including legacy Welch Allyn products that were acquired by Hillrom in 2015, will help Baxter improve care outcomes and broaden access to care. Hillrom’s products include the MacroView® Plus Otoscope, the Volara™ Oscillation & Lung Expansion Therapy System, the PST 500 Precision Surgical Table, and the Centrella® Smart+ Bed.
In a press release, Baxter’s chairman Jose E. Almeida stated:
The Baxter-Hillrom combination unlocks the next phase of our transformation, presenting a new wave of potential to drive greater impact for patients, clinicians, employees, shareholders and other communities we serve worldwide. Integrating our complementary capabilities introduces additional opportunities for growth across our broad geographic footprint and also creates remarkable new possibilities for connectivity with leading-edge digital health innovation focused on enhancing care, lowering costs and increasing workflow efficiency.
According to the press release, Baxter expects the combination to result in ~$250 million of annual pre-tax cost synergies within 3 years.
Boston Scientific To Acquire Blood Clot Removal Tech Company Devoro Medical
Boston Scientific Corp. has agreed to acquire Devoro Medical Inc. in a deal expected to close this year. Boston Scientific previously held a 16% equity stake in Devoro Medical and now agrees to acquire the remaining 84% stake for $269M. Boston Scientific also agrees to pay up to $67M more if Devoro Medical clears certain regulatory and clinical milestones.
Devoro Medical is the developer of the WOLF Thrombectomy® Platform–a technology platform that “targets and rapidly captures blood clots using finger-link prongs that retrieve and remove thrombi in the arterial and venous systems.”
According to Boston Scientific’s press release:
“The addition of the WOLF platform advances our efforts to ensure physicians have the right tools to improve procedural efficiencies,” said Jeff Mirviss, executive vice president and president, Peripheral Interventions at Boston Scientific. “Clot management remains a core focus of our business, and upon commercialization, this highly differentiated technology will complement and expand our offerings to a full suite of interventional strategies for thromboemboli, which also includes the EkoSonic™ Endovascular System (EKOS) and the AngioJet™ Thrombectomy System.”
Boston Scientific plans to accelerate development of the WOLF platform following its acquisition of Devoro Medical, according to Michael R. Jaff, D.O., its Chief Medical Officer and Vice President of Clinical Affairs, Technology and Innovation, Peripheral Interventions.
This deal is the latest in a series of acquisitions this year by Boston Scientific. In January, Boston Scientific agreed to acquire cardiac wearables company Preventice Solutions for $925M. In March, Boston Scientific agreed to acquire the global surgical business of Lumenis LTD for $1.07B. And, in June, Boston Scientific agreed to acquire cardiac ablation device maker Farapulse for $295M.
Nephros Acquires GenArraytion for $1.2 million
Nephros is a water technology company, providing filtration and pathogen detection solutions to the medical and commercial markets. Nephros acquired substantially all of GenArraytion’s assets, namely, GenArraytion’s proprietary assays, multiplexing technology, and selection methods for detecting waterborne pathogens and other microorganisms using Polymerase Chain Reaction (PCR) technology. GenArraytion has developed infectious disease diagnostics for hospital-acquired infections and other water safety targets
GenArraytion currently produces MultiFLEX® Bioassays. These bioassays are customizable for detection of “clinical pathogens, tick- and mosquito-borne pathogens, food- and water-borne pathogens and biothreat agents” according to GenArraytion’s website.
The acquisition enhances Nephros’ capabilities for measuring and monitoring waterborne pathogens utilizing PCR testing, and propels Nephros’ abilities to detect and mitigate the spread of infectious disease in premise plumbing.
Waterborne pathogens are a major worldwide public health concern. In addition to developing organisms and new strains from already known pathogens, high prevention and treatment costs present concrete challenges to the public health sectors. The acquisition will allow Nephros to provide on-site testing and data for premise water management.
Nephros issued 123,981 shares of its common stock to GenArraytion, for an aggregate purchase price of $1.2 million. Half of the shares are subject to a risk of forfeiture, which will lapse upon the satisfactory completion of certain intellectual property transition services. Nephros will also make royalty payments to GenArraytion based on net sales of GenArraytion products over the next five years.
Medical Research Organization NAMSA Announces Acquisition of Reimbursement Strategies Consultancy
NAMSA, which describes itself as “the world’s only Medical Research Organization (MRO) that accelerates medical device development through integrated laboratory testing, clinical research and regulatory consulting services,” has announced the acquisition of Reimbursement Strategies, LLC.
According to Mass Device, “NAMSA is a medical device firm that “offers integrated laboratory testing, clinical research and regulatory consulting services.” According to NAMSA, Reimbursement Strategies is a consultancy “focused on reimbursement, health economics and market access for the international life science industry” which “places a significant concentration on providing clients efficacious and timely development outcomes through the organization’s expertise in reimbursement strategy, health economics, medical policy research and coverage advocacy.”
Christopher Rupp, VP of NAMSA’s global marketing and commercial operations stated that the acquisition of Reimbursement Strategies “will allow clients to proactively address the largest challenges of bringing novel devices to the global marketplace—securing appropriate coverage and payment for new and existing technologies.” Rupp continued to state that “We look forward to delivering device manufacturers faster, more cost-effective commercialization results through our comprehensive, full-service development solution.”
The former President of Reimbursement Strategies, LLC, Edward Black, stated, “We are very pleased to join the NAMSA Team as we work together to provide clients the most critical services required to navigate our industry’s complicated global reimbursement landscape.” Black, who is now NAMSA’s Director of Global Reimbursement Strategy, asserted that, “It is more important than ever for device manufacturers to assess reimbursement challenges early so they may fully integrate this planning into regulatory and clinical research pathways to achieve resource efficiencies and expedite market commercialization.”
According to Business Wire, “NAMSA’s MRO® Approach plays an important role in translational research, applying a unique combination of disciplines—consulting, regulatory, reimbursement, preclinical, toxicology, microbiology, chemistry, clinical and quality—to move clients’ products through the development process, and continue to provide support through commercialization to post-market requirements anywhere in the world.” Business Wire also reports that, “NAMSA operates 13 offices throughout North America, Europe, the Middle East and Asia, and employs nearly 1,000 highly-experienced laboratory, clinical and consulting Associates.”
Boston Scientific Buys Venous-Stent Maker VENITI
Boston Scientific recently announced an agreement to acquire privately-held VENITI, Inc. for $160 million. According to the press release, VENITI submitted a pre-market approval application with the U.S. Food and Drug Administration in June 2018 for the VICI stent system for treating obstructive venous disease. The VICI stent system received CE Mark approval in 2013.
According to the press release, venous obstructive disease affects more than 1.1 million people in the United States and Western Europe annually. Jeff Mirviss, Senior Vice President and President of Peripheral Interventions at Boston Scientific, commented:
Along with our leading AngioJet thrombectomy platform and venous product pipeline, we look forward to meeting the needs of physicians treating both chronic and acute venous disease.
According to the Worcester Business Journal, Boston Scientific announced over $1.5 billion in acquisitions this year alone. Other notable Boston Scientific acquisitions in 2018 include Millipede ($540m), NxThera ($306m), nVision Medical Corporation ($275m), Claret Medical ($270m), and Cryterion Medical ($202m).
Boston Scientific expects the acquisition of VENITI to be immaterial to adjusted earnings per share (EPS) in 2018 and 2019, and accretive thereafter. Nonetheless, shares of Boston Scientific opened trading the day of the announcement up more than 3 percent.
J&J Accepts Platinum Equity’s $2.1B Offer for its LifeScan Subsidiary; Receives Offer for Advanced Sterilization Products Subsidiary
On June 12, 2018, Johnson & Johnson announced acceptance of an offer from Platinum Equity, a private investment firm, to acquire its diabetic monitoring unit, LifeScan, for approximately $2.1 billion. In response to the acquisition, Platinum Equity Chairman and CEO Tom Gores said
We are committed to putting our financial resources and global operating expertise to work in support of the company’s core mission to improve the quality of life for people living with diabetes.
LifeScan offers blood glucose monitoring products to patients for the care of diabetes under the OneTouch brand. According to the press release, LifeScan business earned approximately $1.5 billion in revenue in 2017. Platinum Equity previously reported that LifeScan President Valerie Asbury would continue leading the business.
In February 2018, Bloomberg reported that Johnson & Johnson was seeking to sell off its sterilization products division for as much as $2 billion. The selling price has increased as Johnson & Johnson announced on June 6, 2018, receipt of a binding offer from Fortive Corp. to acquire Advanced Sterilization Products (ASP), a division of Ethicon Inc., for approximately $2.8 billion. If accepted, Johnson & Johnson indicated it expects the proposed transaction to close no later than early 2019.
ASP sells sterilization products under the STERRAD and CYCLESURE brands. ASP’s high level disinfection products are sold under the EVOTECH brand. Johnson & Johnson reported that ASP earned approximately $775 million in revenue in 2017.
Boston Scientific Announces Acquisition of EMcision
On March 5, 2018, Boston Scientific announced its acquisition of EMcision, a privately held company in the United Kingdom and Canada. According to Boston Scientific, this acquisition will expand its range of medical devices in the field of minimally invasive endoluminal procedures as alternatives to conventional surgery. According to Art Butcher, Senior Vice President and President of the Endoscopy Division of Boston Scientific:
As we continue to search for ways to treat pancreaticobiliary cancers, we also seek to improve the quality of life for patients living with a cancer diagnosis today. We are committed to exploring innovative options to help increase the chance of earl diagnosis, improve treatment and advance the ability to remove cancers located in challenging areas of the gastrointestinal tract.
According to EMcision, EMcision was founded by an internationally renowned surgeon and medical device inventor, Professor Nagy Habib, and has developed proprietary medical devices utilizing RF technology for applications such as percutaneous procedures, and open, laparoscopic, vascular, and endoscopic surgeries. EMcision’s devices help patients with advanced cancers located in challenging areas of the gastrointestinal tract for whom surgery is not an option.
EMcision’s website states that EMcision’s flagship product, the Habib™ EndoHPB, is a novel endoscopic bipolar radiofrequency (RF) probe that was the world’s first endoscopic device for tumour ablation via ERCP. The Habib™ EndoHPB has been cleared by the U.S. Food and Drug Administration (FDA) and received CE mark from the EU. EMcision devices are currently being sold in 38 countries around the world and used in most of the top cancer centers in the United States.
With regards to the acquisition, Cherif Habib, EMcision’s outgoing CEO, stated: “By partnering with Boston Scientific, we will continue delivering on our mission of improving the quality of life of cancer patients on much larger scale. Boston Scientific has the resources and the know-how to further improve our technology, expand clinical indications and make it available to may more patients.” According to Yahoo Finance, Boston Scientific’s Endoscopy division revenues rose 14.8% year over year to $436 million in the last reported quarter.
Microbot Medical to Acquire CardioSert’s Technology
Microbot Medical Inc. announced that it entered into an agreement with CardioSert Ltd. to acquire CardioSert’s patented guidewire technology, including R&D information, technical know-how, and intellectual property.
Microbot expects the acquisition to close in April 2018, at which time Microbot expects to have a patent portfolio of 25 issued/allowed patents and 15 pending patent applications worldwide, including CardioSert’s one issued patent (U.S. Pat. No. 9,586,029) and three pending patent applications. According to CardioSert, CardioSert’s technology offers capabilities such as steering and adjustable stiffness to guidewires used in interventional cardiology, radiology and vascular surgery. These features give physicians the ability to control the tip curvature, to adjust tip stiffness in a gradually continuous manner, and to produce impacts with the tip for negotiating calcified segments.
Microbot believes the technology has uses in other spaces, including peripheral intervention, neurosurgery, and urology. Microbot also believes the technology, when added to its existing robotic capabilities, will be consistent with its strategy to develop micro-robotic technologies for surgeries utilizing the natural and artificial lumens in the human body, expand and enhance its intellectual property portfolio, and allow it to enter adjacent medical spaces and applications.
Microbot reports that CardioSert will receive 100,000 restricted shares of Microbot’s common stock, cash payments totaling $300,000 (including $50,000 paid at signing), the potential for future milestone payments based on development progress and regulatory approvals, as well as royalties from futures sales related to the technology.
Teleflex Acquires UroLift® Maker NeoTract for $1.1 Billion
Wayne, Pennsylvania-based Teleflex Inc. announced it will purchase privately-held NeoTract Inc. for approximately $1.1 billion. According to the press release, Teleflex will pay NeoTract $725 million when the deal closes and an additional $375 million upon NeoTract hitting certain sales goals through 2020. The companies said they expect the deal to close within the next 30 days.
According to its website, Teleflex is a global provider of medical technologies in surgical, anesthesia, cardiac care, urology, and respiratory care fields. NeoTract describes itself as a company dedicated to developing minimally-invasive and clinically-effective devices that address unmet needs in the field of urology. NeoTract’s device, the UroLift® System, is said to treat benign prostrate hyperplasia (BPH) by using small implants to hold the enlarged prostate tissue out of the way of the urethra.
Teleflex’s CEO Benson Smith characterized NeoTract as “a truly unique company with a differentiated technology that targets a greater than $30 billion addressable market.” Smith also stated that a second-generation UroLift® System is expected to launch in the second half of 2018. NeoTract’s revenue is expected to be between $115 million to $120 million this year, compared to about $51 million in 2016, and is expected to increase at least 40 percent in 2018, the companies said in a joint statement.
Reuters notes that the deal is Teleflex’s 23rd since 2008 and follows its $1 billion acquisition of Vascular Solutions in December. Teleflex expects the NeoTract deal to slightly diluteTeleflex’s adjusted earnings this year, be neutral to profits next year, and be accretive starting in 2019.
Philips Acquires Spectranetics for $2.16 Billion
According to a June 28, 2017 press release, Dutch healthcare company Philips has agreed to buy Colorado Springs-based Spectranetics Corporation, a cardiac device manufacturer, for approximately 1.9 billion euros ($2.16 billion), inclusive of Spectranetics’ cash and debt. Philips states in the press release that the acquisition of Spectranetics will expand and strengthen Philips’ Image-Guided Therapy Business Group. According to the press release, Spectranetics is growing at a double-digit percentage rate and expects sales this year of around $300 million.
According to Spectranetics‘ website, its products include laser atherectomy catheters for treatment of arterial blockages with laser energy. In addition, Spectranetics produces drug-covered balloons to treat blockages. Philips stated that the drug-covered balloons are a key growth driver in Spectranetics’ portfolio. According to Philips, Stellarex drug-coated balloon is CE-marked and under review by the U.S. Food and Drug Administration (FDA) for premarket approval.
According to the press release, Philips is offering Spectranetics shareholders $38.50 in cash per share, which is a 27 percent premium to the closing price of the Spectranetics shares on June 27. According to Bloomberg, Philips also will buy back as much as 1.5 billion euros ($1.7 billion) of its own stock starting in the third quarter, and the share buyback program will run for two years.
Philips Buys RespirTech for Undisclosed Amount
Dutch conglomerate Philips recently announced that it will purchase Respiratory Technologies Inc. (RespirTech). According to its website, RespirTech describes itself as a St. Paul, Minnesota-based provider of inCourage vests, which help fight respiratory disease. According to a news release, the terms of the deal were not disclosed.
RespirTech’s website states that the inCourage vest uses high-frequency chest compression to help loosen and move mucus through the lungs. According to RespirTech’s website, the inCourage technology was developed by Pediatric Pulmonologist Warren Warwick, M.D., and Leland Hansen, MPH, in the early 1990’s to provide more effective secretion clearance for University of Minnesota cystic fibrosis patients.
According to Philips’ website, the conglomerate has primary divisions in the areas of healthcare, lighting, and home electronics. Philips’ 2016 annual report states that sales in its HealthTech portfolio increased 4% and topped $19 billion. In contrast, news sources state that RespirTech was founded in 2004 and reportedly had nearly $37 million in revenue in 2015.
Regarding the acquisition, John Frank, Philips’ business leader for sleep and respiratory care, said in a news release:
With this transaction, we will broaden our portfolio with a proven therapy to enable patients with chronic respiratory disorders manage their condition and receive the care they need in the home.
According to Philips’ CEO, Franz van Houten, Philips has transformed itself over the last five years into a differentiated global health tech leader. Mr. van Houten stated that the markets Philips’ serve have attractive growth and attractive profitability. According to news sources, GE Healthcare, Siemens Healthineers, and Toshiba Medical Systems are other conglomerate divisions competing with Philips in the healthcare space.
As one analyst notes, the Twin Cities have produced a number of competing companies that make vests for treating lung conditions, including New Prauge-based ElectroMed Inc., and St. Paul-based Hill-Rom.
MedPlast Completes Acquisition of Vention Medical
MedPlast, Inc. recently announced that it has completed its acquisition of Vention Medical‘s device manufacturing services arm. The press release states that the acquisition “broadens MedPlast’s manufacturing capabilities and bolsters its position as a leading services provider to the worlds’ largest original equipment manufacturers.”
According to its website, Tempe, Arizona-based MedPlast is a global provider of plastic processing and manufacturing for medical devices. The company services thermoplastic and elastomeric materials and plastic processing. Vention Medical describes itself as a medical device design, engineering, and manufacturing company. The company specializes in molded components and finished device assembly and packaging of interventional and minimally invasive surgical products.
Harold Faig, CEO of MedPlast sees significant potential in the acquisition. He explains that:
This acquisition is a first and important step in our strategic plan to expand our offering to customers [and o]ur goal is to build on our core manufacturing and engineering capabilities to provide our customers with a comprehensive portfolio of end-to-end product solutions.
The president of Vention Medical’s device manufacturing service arm, Bill Flaherty, shares Mr. Faig’s enthusiasm
We are excited to come together with MedPlast. We serve many of the same customers who will benefit from our combined offerings and shared commitment to providing the highest quality standards and facilities in the industry.
The acquisition was initially announced in late February, 2017. According to the press release, the acquisition:
[W]ill extend MedPlast’s global footprint to 22 manufacturing facilities located in key markets through North and Central America, Asia and Europe. Once complete, the acquisition will more than double MedPlast’s size.
MedPlast’s current acquisition may foreshadow the strategic direction of the company. Kevin Swan, a partner at Water Street Healthcare Partners, a Chicago-based private equity firm backing MedPlast recently stated that “[t]his is the first of what we expect will be more strategic acquisitions to build MedPlast into a market leader.” Indeed, before the acquisition, MedPlast was ranked by Plastic News as the 27th largest injection molder in North America, by revenue, in a $40 billion market for medical device services. At the time, the company had an estimated $275 million in annual sales and 800 employees at 7 manufacturing locations. The company now operates 11 manufacturing facilities.
ICU Medical Buys Hospira Infusion Systems From Pfizer
ICU Medical and Pfizer have reached an agreement to transfer ownership of Hospira Infusion Systems to ICU Medical, according to a joint press release on October 6.
According to the press release, in exchange for the Hospira division, which Pfizer acquired in September 2015, Pfizer will receive $600 million in cash and $400 million in ICU Medical stock. After the acquisition, Pfizer will own approximately 16.6% of ICU. Furthermore, Pfizer will have the right to nominate one director to ICU’s board as long as it holds 10% or more of ICU’s stock.
According to the Hospira Infusion Systems website, its products include IV pumps, solutions, and devices. Vivek Jain, ICU Medical’s CEO, explained that:
“By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company.”
Jain further noted that Hospira has been using ICU’s licensed technology for more than 20 years.
Reuters reported that ICU Medical’s shares jumped 14 percent after the news.
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