Mergers and acquisitions (M&As) are a strategic means to grow the value, profitability and reach of the MedTech business. Despite the various pros and cons of the Merger or Acquisition process, tremendous potential for revenue and cost synergies makes M&As a clear value-driven choice. Over the past decade (2010-20), the value of M&A deals consistently increased, peaking in 2015 (Source: Statista.com).
Then, owing to pandemic conditions in 2020, we’ve seen a striking decrease in the number of global MedTech M&As i.e., 27.3 billion USD – the lowest since 2013. The next year 2021, saw the M&A numbers pick up again to a healthy value. According to the Medical device network, In 2022 there’s been a 95.9% drop in global deal values amounting to an average of USD 7.88 billion over the past 12 months.
Prominent acquisitions over the recent months include Medtronic’s acquisition of Intersect ENT, Pfizer-Biohaven Pharmaceuticals, Boston Scientific-Baylis, Conmed-In2Bones Global and many others. While all these acquisitions & mergers have immense potential (the good side of M&As). The mutual benefits are unbeatable especially in a tight medical device market.
On the flip side, M&As may not always be mutually beneficial. Some M&As end up as a way for major corporations to drown out competition from smaller start-ups and gain a bigger market share (the bad side of M&As).
Quasar is a medical device maker that’s geared toward positive growth. Quasar’s acquisition of TE/Creganna operation in Singapore, in December 2021, was a step toward complimenting Quasar’s existing range of services. With this new acquisition, Quasar now offers a comprehensive manufacturing service for minimally invasive device manufacturing, including every kind of catheter manufacturing process. Combining the capabilities from the TE/Creganna – specializing in Braid & Coil Shaft Manufacturing, Catheter Assembly, and Braiding & Extrusion, together with Quasar’s current standing as a leader in sensor technology, Quasar Medical cements its position as the leading contract manufacturer in the attractive minimally invasive interventional segment of the medical device market. Quasar now has the most complete product and capability offering in the industry and is a fully integrated strategic supplier to major OEMs.
Apart from the individual instances of M&As being beneficial or not, the big picture also determines the conditions for M&As to proceed. Today’s volatile stock markets, high inflation rates, pumped up interest rates, more pricing upsurges owing to the war in Ukraine and other contributing factors have put most investors on edge. Investors, including MedTech giants are waiting for calmer market conditions to move forward with their M&A plans in the coming months.
There are many improvements needed in the medical device M&A space. As a partner of both the large and small medical device makers, Quasar medical has a unique perspective to offer. We will be covering our perspective on how the giants can make most of their acquisitions of the small companies.