Tuesday 24 July 2012, Amsterdam
The new “Medical Equipment Quarterly Deals Analysis - M&A and Investment Trends - Q1 2012 ” report is an essential source of data and trend analysis on the mergers and acquisitions (M&As) and financing in the medical equipment market. The report provides detailed information on M&As, equity/debt offerings, private equity, venture financing and partnership transactions registered in the medical equipment industry in Q1 2012. The report discloses detailed comparative data on the number of deals and their value in the past five quarters, categorized into deal types, segments, and geographies. The report provides information on the top private equity, venture capital and advisory firms in the medical equipment industry.
The data presented in this report comes from proprietary in-house Medical eTrack deals database and primary and secondary research.
M&A Activity In Medical Equipment Industry Was Driven By Some Of The Major Deals In Q1 2012
M&As and asset transactions, which include change in ownership and control of companies or assets (this report does not consider this value as a new investment in the market), reported an increase in deal values in Q1 2012 with $7.4 bn, as compared to $6.7 bn in Q4 2011. However, the number of deals decreased marginally from 145 in Q4 2011 to 144 in Q1 2012. On a year-on-year basis, the number of deals and deal values recorded a decline of 17% and 16% respectively in Q1 2012, when compared to 175 deals worth $8.8 bn in Q1 2011.
Some of the major deals that contributed much the to deal value in Q1 2012 include Asahi Kasei Corporation, a diversified company, commencing a tender offer to acquire ZOLL Medical Corporation, a medical technology company that designs, manufactures and markets resuscitation and critical care devices, for a purchase consideration of $93 per share or $2.2 bn in cash; Boston Scientific Corporation exercising its option to acquire Cameron Health, Inc., a manufacturer and marketer of implantable cardioverter defibrillators (ICD), for approximately $1.4 bn; and Linde AG (The Linde Group), a Germany-based industrial gases and engineering company, announcing the acquisition of Continental Europe Homecare business of Air Products and Chemicals, Inc., a US-based industrial gas manufacturing company, for a purchase consideration of €590m ($750m).
The healthcare IT market continues to attract investors’ attention in Q1 2012. The market reported 37 deals worth $3.3 bn in Q1 2012.
Dollar Value Of Equity Offerings Increases 26% In Q1 2012
Global equity offerings, including initial public offerings (IPO), secondary offerings, and private investment in public equities (PIPEs), reported an increase in deal values in Q1 2012. The segment reported deals worth $1.7 bn in Q1 2012, as compared to $1.4 bn in Q4 2011. However, the number of deals decreased to 58 in Q1 2012 from 69 in Q4 2011. On a year-on-year basis, the number of deals was fewer and deal values were higher in Q1 2012 when compared to 84 deals worth $1.7 bn in Q1 2011.
IPOs reported an increase with eight deals worth $406.1m in Q1 2012, as compared five deals worth $300.9m in Q4 2011. There were 16 secondary/ follow-on offerings worth $1.1 bn and 34 PIPE deals worth $241.3m in Q1 2012.
Debt offerings, including secondary offerings and private debt placements, recorded an increase in the number of deals and deal values in Q1 2012 with 28 deals worth $7.2 bn, as compared to 18 deals worth $7.1 bn in Q4 2011.
Absence Of New Investments In The Venture Capital Market In Q1 2012
After lackluster fourth quarter in the public markets, the venture capitalists remained cautious and withheld their investments in Q1 2012. The medical equipment industry reported a decline in both dollars and the number of deals in Q1 2012 with 203 deals worth $1.3 bn, as compared to 231 deals worth $1.5 bn in Q4 2011. On a year-on-year basis, the number of deals and deal values increased in Q4 2011, when compared to 170 deals worth $914.3m in Q4 2010.
In Q1 2012, start-up stage companies accounted for 47% of the total deals in the VC segment. Growth capital/expansion stage companies followed in the second place with 36% of the deals. Investment wise, growth capital/expansion financing again stood at the top with 49% of the total deal values in Q1 2012, followed by start-up stage financing with 37%.
New Enterprise Associates topped the list of venture financing firms by participating in 13 deals worth $302.5m during last four quarters (Q2 2011 to Q1 2012). The firm focused on investments in North America-based companies between Q2 2011 and Q1 2012. Sensors for Medicine and Science, Nova Medical Centers India Private Limited, Moximed, Inc. and Relievant MedSystems are some of the ncompanies, which were successful in raising maximum amount of funding from New Enterprise during the same period.
The private equity (PE) market recorded a marginal increase in the number of deals and a decrease in deal values in Q1 2012 with 14 deals worth $395.5m, as compared to 13 deals worth $879m in Q4 2011. On a year-on-year basis, the deal flow declined sharply in Q1 2012, when compared to 20 deals worth $938.5 in Q1 2011.
According to Analyst Bhaskar Vittal, “PE/VC investments are expected to remain subdued due to uncertainties surrounding the healthcare reforms in the US. Investors will be looking for more clarity on the healthcare reforms. This affects investments in start-ups the most.”
Deal Activity In North America Decreased In Q1 2012
North America reported a decrease in the number of deals and deal values in Q1 2012. The region recorded 479 deals worth $11.7 bn in Q1 2012, as compared to 494 deals worth $14.9 bn in Q4 2011. On a year-on-year basis, deal activity declined in Q1 2012, as compared to 547 deals worth $24.9 bn in Q1 2011.
With the effects of the debt crisis abating and economic conditions showing recovery in Europe, the region reported an increase in the number of deals and deal values in Q1 2012. The region recorded 144 deals worth $3.8 bn in Q1 2012, as compared to 120 deals worth $1.5 bn in Q4 2011.
Asia Pacific registered an increase in deal values in Q1 2012. The region recorded deals worth of $3 bn in Q1 2012, as compared to $1.5 bn in Q4 2011. However, the number of deals declined from 82 in Q4 2011 to 78 in Q1 2012.
According to Analyst Bhaskar Vittal, “The deal activity might continue to decline due to lack of clarity on healthcare reforms. Also this year’s Presidential elections have a bearing on the investor’s confidence and deal’s activity. We might witness more partnership agreements between companies as they do not involve huge capital commitment and can be strategic in nature.”
