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Investment and Acquisitions Trends in Medical Equipment Market 2011

The Majority of Mergers and Acquisitions That Took Place from 2006 to 2009 were of a Deal Value Less than $25m
London, London, United Kingdom ( 25/02/2011
The medical equipment market offers strong growth prospects and is highly regulated and driven by constant technological innovation. The three largest markets for medical equipment are the US, the EU and Japan. The majority of mergers and acquisitions that took place from 2006-2009 were of a deal value less than $25m. Big companies operating in the fields of in vitro diagnostics, orthopedics and cardiology are looking for acquisitions to enhance their growth prospects and diversify their portfolio. More than 74% of the deals were less than $25m in size from 2006 to 2009, indicating that the medical equipment industry is highly fragmented and the need for new technological innovation is huge. The potential exit value of various start-up firms is less than $25m. The market is highly fragmented, with many small players with annual revenue less than $5m. Small innovative firms are associated with developing new medical technology products. Most of these organizations specialize in only one technology and much redundancy exists between companies. Start-up firms in medical equipment companies are groomed by investors, so that they can be acquired by larger companies. Small firms, after receiving US FDA marketing approval for their products, are targeted for acquisition by large medical equipment companies. There exists an advantage for both small and large firms. Small firms benefit from added resources, while large firms gain from advanced technologies. Therefore all these factors and the fiscal pressure of staying afloat are compelling many smaller firms to merge with larger ones.

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Currently, pharmaceutical companies are diversifying their portfolios by acquiring medical equipment companies. Although pharmaceutical companies have been generating huge revenues, intense competition is seen in the pharmaceutical industry due to patent expiries and rising R&D costs. Pharmaceutical companies in the US and Europe are experiencing increasingly aggressive patent litigation, shortening the time of patent protection and accelerating the entry of generic versions. Even legislators are in favor of this approach, considering generics as a means to reduce the budgets for drug therapies. Therefore, pharmaceutical companies are diversifying into medical equipment companies, and the industry has witnessed mega deals. The pharmaceutical companies are trying to diversify their portfolios in high profit sectors by acquiring medical equipment companies.

GBI Research’s report, “Investment and Acquisitions Trends in Medical Equipment Market 2011”, provides key data, information and deals analysis that took place from 2006-2009 in the global medical equipment market. The report provides key data on M&A deals by type, M&A deals by value range and M&A by geography in the medical equipment market. The report provides in-depth analysis on the M&A in the top five medical equipment categories – In Vitro Diagnostics, Cardiovascular Devices, Orthopedic Devices, Ophthalmic Devices and Drug Delivery Devices, and market drivers for these categories. The report also mentions M&A key deals in 2010 with detailed analysis. The report analyzes Mergers and Acquisition opportunities and risk evaluation for the top five medical equipment categories. This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research’s team of industry experts.

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