• MedWorld Advisors

2019 - A Year in Review - M&A MedTech &LifeSciences

The healthcare industry is constantly evolving with large amounts of resources dedicated towards R&D and introduction of new technologies. Companies in this industry must keep up with latest industry trends and standards as they risk becoming obsolete and losing market share. Only major players in the healthcare industry have the resources to rapidly invest into R&D or conduct acquisitions to keep pace with the market and stay ahead of competition. Within the healthcare industry, the MedTech and Life Sciences sub-sectors are especially susceptible to rapid technological evolution. Major players increasingly prefer to acquire newer companies offering complementary, market-changing products rather than to invest resources into the complete product development cycle themselves.

The MedTech industry has witnessed a record-breaking year in terms of deal value. Major market players such as Smith & Nephew and Stryker have conducted multiple M&A transactions each. The period has seen mergers between complementary organizations providing synergistic avenues for long-term growth and strategic acquisitions by large medical companies. The industry has also witnessed infrequent financial transactions such as the management buyout of WSR Medical. Acquisitions by financial buyers mostly involved target companies that are leaders in their niche market with robust growth prospects and strong macro tailwinds.

The Life Sciences industry has also seen robust deal activity with pharmaceutical companies accounting for the bulk of the multi-billion-dollar transactions. Novel therapeutics targeting chronic diseases have been keenly pursued by major biotechnology companies. Certain therapeutic areas such as rare disease and oncology continue to remain attractive due to superior margin profiles. The pharmaceuticals services sub-sector is also witnessing significant tailwinds, given the continuing outsourcing trend amongst pharmaceutical companies

Source: FactSet, EY, Deloitte, KPMG