Large medtech companies seem to have found some loose change down the back of the sofa. At the half-year point the combined value of acquisitions closed in the device space has reached $26.8bn, already greater than the total for all of 2013.
This is all the more remarkable because it does not include the still-open megadeals contracted in the second quarter by Medtronic and Zimmer. Although only 82 medtech M&A transactions have been concluded in the first half, fewer than the 98 seen a year earlier, acquirers are picking their targets carefully, and when they find what they want they are willing to spend substantial amounts to secure it (see tables).
This newfound willingness to splash the cash is also on display in the biopharma arena as the entire healthcare sector enters a new phase of consolidation (Huge second quarter for M&A sets 2014 on track for record year, July 9, 2014). Many of the most recently announced deals in both pharma and medtech have been at least partly driven by tax savings or the desire to put non-US cash to use, but there are interesting strategic motives at play too – on both the buying and selling sides.