The market is highly fragmented, and the separation of product technology determines the way the industry kings are integrated. Medical equipment is a technology-driven industry. Leading companies focus on the market side. In research and development, “the ship is difficult to turn aroundâ€, it is necessary to protect its position and avoid being subverted by small and medium-sized innovative companies. M&A is a direct means to break the product technology. The highly “fragmented†market ceiling effect is obvious, and companies need to constantly try to get involved in new areas. Since the 1980s, Medtronic has promoted the M&A strategy, expanding from the pacemaker business to spine products, cardiac stents, insulin, surgical instruments and many other fields, and maintained its share advantage in most market segments, continuing to consolidate its leading position. In recent years, when major changes have taken place in the industry environment, mergers and acquisitions have also become a shortcut for the company to achieve rapid transformation.
M&A is more strategic, from product to technology to market, it is easier to form synergy. Compared with the pharmaceutical industry, medical device mergers and acquisitions are more active, and the leading strategy is stronger. Summarizing Medtronic's integration since the 1990s, strategic objectives include: 1 acquiring new technologies as a technology reserve or eliminating potential competitors; 2 consolidating and strengthening existing businesses, expanding market share; 3 expanding product business and entering new markets; 4 functionality Integrate and achieve strategic transformation. From the case of successive acquisitions of the Dharma model, Dan Li, AVE, MiniMed, Kyphon and Kehui Medical, it can be seen that compared with the simple complementary product line integration, Medtronic's outreach strategy ensures that the company can find new performance growth points and continuous growth potential at different stages. More synergistic.
M&A in the medical device sector is more valuable. As the capital market's awareness of the extension of growth is becoming clearer, the secondary market reaction is relatively positive. From the large case of Medtronic's five large-scale cases, from the announcement to the completion of the transaction window, the mergers and acquisitions of the United States and the target stocks are absolutely Revenue and excess positive returns. At the same time, we sorted out 50 cases of mergers and acquisitions in the history of Medtronic. The closing price of the plan announcement on the same day or the next day has a higher proportion of excess positive returns than the industry index in the same period.
Implications for A-share medical device listed companies: Inevitable choice, strategy needs to be cautious. The domestic medical device industry is also highly segmented, the product market bottleneck is prominent, and the technology is separated from each other. M&A is an inevitable choice. In fact, under the background of slowdown in exports and overall stable construction of domestic hospitals, China's medical device industry has entered the era of mergers and acquisitions, and strategic mergers and acquisitions based on products, markets, models and even platforms have begun. Compared with the international leader Medtronic, domestic companies should be more cautious in formulating and implementing strategies. From the perspective of objective environment, the integration of the market, the scope of Medtronic is global, and it is more likely to choose the target with technological leadership or even sufficient market advantage. It is also easier to achieve synergy after integration. Domestic medical equipment mergers and acquisitions are more to expand product lines and foster new growth points. The technical competitiveness and market position of the targets remain to be seen. In the face of technologically complex cross-over device products and information asymmetry market, M&A integrators are prone to bias in the competitiveness of products and M&A targets. In terms of integration, the integrators entering the merger face a strange market and need a longer period of time from production to sales.
Risk warning: integration synergy is lower than expected, legal risk, policy risk.
table of Contents
1. Characteristics of the US medical device industry
1.1. The market is highly specialized and the sales model is highly collaborative.
1.2. The product is iteratively swift, and the capital exits behind the scenes.
1.3. The industry is booming and the business model is reshaping
2. Medtronic - the extraordinary path to M&A
2.1. Acquisition of the pivot method? Danli and AVE, the beginning of the road to the king
2.2. Acquisition of MiniMed, the first to target the insulin drug market
US$2.339 billion acquisition of Kyphon, becoming the global leader in spinal products
2.4. Huge investment merged with Kehui Medical, the aircraft carrier re-launched
3. Implications for medical device mergers and acquisitions
3.1. Revelation 1: Outsourcing is the only way for enterprises to maintain competitive advantage
3.2. Revelation 2: Integration to achieve synergy is a highlight of medical device mergers and acquisitions
3.2.1. Expanding market share, significant results in inter-bank mergers and acquisitions
3.2.2. Targeting the leader, “diversified†integration to seize the opportunity
3.2.3. Taking advantage of the trend, M&A has become a shortcut to rapid transformation
3.3. Revelation 3: Mergers and acquisitions in the field of medical devices are more likely to gain market value
4. Investment advice
5. Risk warning
　　 1. Characteristics of the US medical device industry
1.1. The market is highly specialized and the sales model is highly collaborative.
The global medical device market is huge, but the types are complex, the degree of personalization is high, and the market is highly subdivided. The US FDA has divided more than 1,700 types of medical devices into 17 medical fields. According to the scale of income, the most important categories include orthopedic instruments, surgical instruments, diagnostic instruments, stents and catheters (cardiovascular interventional instruments), syringes and consumables, blood transfusion and intravenous equipment, dental equipment and so on.
According to statistics from the US GAO (Government Accountability Office) in 2014, the total sales of the US medical device industry reached US$136 billion, accounting for 45% of the global market. Although the overall scale is large, due to the variety of types, it presents a high degree of “fragmentationâ€: that is, the market for most single-category products is not large, and the market size of each market segment is limited, such as the cardiovascular device field, which can be further subdivided. For heart rate management systems (implantable defibrillators, pacemakers, etc.), cardiac interventional instruments (stents, catheters, balloons, etc.) and cardiac repair equipment (artificial hearts, etc.), the "ceiling" effect of each segment is significant .
.jpg)
On the other hand, the traditional medical device business model is a single product payment model, and new products based on existing channels are easier to push into the market. For example, in the field of implanted devices, whether it is high-value consumables for cardiovascular and spine/ orthopedics, the sales model is established by a medical device company to establish a standardized training center, and assistant staff and instructors to perform surgery. A similar business model lays the foundation for the expansion and extension of the product line, and the sales integration after the merger is easy to form a synergistic effect.
1.2. The product is iteratively swift, and the capital exits behind the scenes.
The medical device industry in the United States belongs to the industry with high R&D investment. New materials emerge in an endless stream, and the diagnosis and treatment methods are changing with each passing day, resulting in frequent product and technology replacement, and the product cycle of medical devices is short. Although small companies do not have the ability to compete with large companies on the sales side, they are more likely to respond quickly to the market, generally focusing on a certain field or a certain technology, making research and development more efficient, and making it easier to develop the most applicable cutting-edge products. The constant updating of technology has led to changes in the market share and status of competing companies, and the “leading†position is often easy to change. At the same time, technical barriers vary in various fields of medical devices. Most medical devices are free to market competition, and new entrants are likely to cause deterioration of the competitive environment.
In order to consolidate the market position, large companies have continued to acquire M&A products with the aim of expanding product lines, expanding market share or eliminating potential competitors in disguise. This has become an eternal model for medical device companies to survive.
.jpg)
Since the end of the 1990s, the number of IPO projects in the medical device industry in the United States has been decreasing every year. As the opportunities for SMEs to become bigger and stronger are getting smaller and smaller, it is more difficult to enter the capital in the early stage and try to withdraw through IPO. At the same time, the gap in the premium level of the US primary and secondary markets has gradually narrowed, and early investors have the incentive to seek capital withdrawal through mergers and acquisitions rather than exit through higher risk IPOs. Corresponding to the decline in the number of IPO projects, the tide of mergers and acquisitions is in full swing. The number of new M&A projects is increasing every year, accompanied by an increase in total transaction volume. After 2003, mergers and acquisitions gradually surpassed IPOs as the main channel for major capital withdrawals.
.jpg)
China Extract Powder For Use As Dietary Supplement Extract Powder, Extract Powder Manufacturer
Shaanxi Kang New Pharmaceutical co., Ltd. , https://www.bodybuildingoil.com