Tuesday, May 17, 2011

More Mergers to Come??

With the recent acquisition of Synthes by Johnson and Johnson (Depuy Orthopedics) ($21.3 billion) and now Orthovita by Stryker ($316 million), one could anticipate that the device sector of the healthcare industry will continue to see an increase in mergers and acquisitions if current trends continue. In an interview with Medical Device Daily (FRIDAY, APRIL 22, 2011VOL. 15, NO. 73), Richard Cohen of the Walden Group, a strategic investment banking firm for the healthcare industry, explained how larger companies within the industry were forced into efficiency as a result of the down turn in the economy.

“Larger companies have come to realize that because of slower hospital market, capital budget constraints, reimbursement issues, and a tougher regulatory environment, core product lines are just slower to grow, Cohen said. “Overall it is harder to grow organically.” So these companies have larger balance sheets, cash in the bank swelling, difficulties growing organically, plus Wall Street is watching the stock prices quarterly, it’s really not possible to grow on one’s own and there are ample opportunities to grow by acquisition.”

With a handful of large companies within the foot and ankle device/implant industry, it seams only a matter of time before some of the midsized up and coming companies enter into the game of mergers and acquisitions. Check out the current fixation companies here at www.footandanklefixation.com.

No comments:

Post a Comment