GLOBAL MEDICAL EQUIPMENT AND SUPPLIES...

GLOBAL MEDICALEQUIPMENT AND SUPPLIESREPORT 2014

A C l e A rwAt e r I n t e r n At I o n A l t e A m r e p o rt

Welcome

2014 thus far has been marked by a number of notabletransactions in the global medical equipment and suppliessector, as leading players sought to expand further into newmarkets and geographies while taking advantage of exciting newtechnologies.

The trend for big ticket deals this year - such as Medtronic'swhopping €31.6bn acquisition of Covidien, Thermo Fisher'stakeover of Life Technologies Corporation, and Zimmer's bid forBiomet - continues the drive that emerged in 2013. We alsothink the second half of 2014 promises plenty of action on theM&A front, typified by the intense speculation this summer overthe future of Smith & Nephew as it is courted by US players.

Although deal activity in the US dropped slightly last year, itremains by far the most active market for M&A activity in thesector with trade players leading the way. However a morerigorous regulatory climate is putting pressure on the industryespecially in the VC arena.

US buyers continue to look overseas with Europe remaining anattractive location, whilst Far East companies and investors arebecoming notably more adventurous. The trend is typified bythe likes of Chinese medical devices developer Mindray MedicalInternational acquiring Zonare Medical Systems of the US, andby the activity of Indian private equity firm Samara Capitalwhich has made a number of investments in the health market.

Such global activity is ultimately being driven by the fact thatmedical device companies across the world are facing the samesignificant resource and financial constraints at precisely the timethat new innovation is so paramount. In so doing it is creating alandscape that is both challenging and exciting in equal measure.

We hope you enjoy the read.

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ContentsGLOBAL M&AACTIVITY 4

The industry remains a major sourceof deal activity in the health sector

2013 M&A HIGHLIGHTS 6

Last year was notable for anumber of big ticket transactions

US MARKET 10

The US industry continues to lead the way in terms of M&A activity

EUROPEAN MARKET 14

The continent remains home to a number of leading companies in the industry

ASIAN MARKET 19

Ambitious new players from the Far East are spreading their global footprint

CLEARWATERINTERNATIONAL DEALS 22

A round-up of recent ClearwaterInternational transactions in thehealthcare industry

For the purposes of this report we havequoted all figures in euros using an average£/€ exchange rate.

2012 1.23 2013 1.18 2014 1.21

This report is published by Clearwater International Editors: Jim Pendrill & Sarah FernandezDesign: www.creative-bridge.comSubscription: [email protected] part of this publication may bereproduced or used in any form without prior permission of Clearwater International.

G L O B A L M E D I C A L E Q U I P M E N T A N D S U P P L I E S R E P O R T 2 0 1 42

ramesh JassalDirector, UK

+44 845 052 [email protected]

the medical equipment and supplies sector can be broken down into the following sub-sectors:

Stents and pacemakers; cardiovascular equipment, therapies, and implant devices; solutions in

cardiovascular disease, soft tissue repair and critical care management; cardiology, radiology

and vascular surgery devices.

Cardiovascular

Dental equipment and supplies, dental implants and prosthetics, dental imaging systems, dental

waxes and mouldings, dental laser systems, and any other dental accessories.

Dental

General disposable equipment and supplies including gloves, syringes, catheters, electrodes,

bandages, plasters, first-aid kits, sutures, medical register paper, drainage bags, feeding bags, and

wound management and compression products.

DisposableEquipment & Supplies

Hospital, clinic and outpatient equipment and supplies (including non-disposable durable

equipment such as ventilation, patient handling products, rehab and medical furniture). Surgical

aesthetic and electrosurgical devices, instruments and apparatus including carts, tables and

consoles and hearing devices.

GeneralEquipment & Supplies

Chemistry, microbiology, immunology and genetic tests, diagnostic instruments and equipment

related reagents and test kits including blood diagnostic tests used in the detection and

monitoring of diseases and disorders.

In VitroDiagnostics,Equipment & Supplies

Any equipment used by laboratories including instruments, glassware and machines. Kits and

reagents for life science research, DnA sample storage equipment and technology, and

products used in protein interaction.

Life Science Tools& Services

Implants for neurovascular purposes, electrical stimulations, neurovascular equipment,

neuromodulation units, and medical devices for the treatment of neurological diseases.

Neurovascular

eye-related products including contact lenses, intraocular lenses, cataract surgical devices, eye

tracking devices, and laser vision correction products. ophthalmic instruments, imaging

systems and viscoelastic devices. optical scanners, coherence tomography diagnostic devices,

and optoelectronic measurement devices.

OphthalmicGoods, OpticalInstruments &Lenses

limb, hip, knee, shoulder, ear, nose, throat and mouth implants; jaw prosthetics; and

orthopaedic braces, plates, supports and shoes.

OrthopaedicImplants &Prosthetics

equipment monitoring vital signs e.g. blood pressure monitoring. Imaging equipment (including

medical cameras) e.g. mrI, Ct, X-ray, ultrasound. other patient monitoring and intervention

products including defibrillators. remote monitoring products and radiography, radiotherapy

products and home therapy.

PatientMonitoringEquipment &Therapies

A C L E A R WAT E R H E A LT H C A R E T E A M R E P O R T 3

Sector split


The 10 largest transactions so far this year havecontributed to €16,159m of total deal values, averaginga 3.9x revenue and a 21.2x EBITDA multiple.

Thermo Fisher Scientific’s blockbuster €12.2bnacquisition of Life Technologies Corporation single-handedly accounted for 71% of value. Life Technologiesis a US company that forms cell culture productswhich are deployed in biological drug research,development and production. The acquisition willcatapult Thermo, the world's largest maker of scientificand laboratory equipment, to the forefront of thefledgling field of personalised medicine.

The first five months of 2014 have seen good levels of deal activity with 82 deals.

In 2013, there was a total of 283 deals in the medical equipment and supplies sector compared to 330 deals in 2012- a decline of 14%. Average deal size with values disclosed decreased from €251m to €219m in 2013, although theaverage figure for deals under €600m increased from €69m to €79m.

Global M&A activity

number of deals 330 283 82

Total deals 2012 2013 2014 (Jan - May)


transaction value (€m) 35,449 25,405 17,217

Average deal size (€m) 251 219 465

Total deals (with values disclosed) 2012 2013 2014 (Jan - May)




Deals less than €600m(with values disclosed)

2012 2013 2014 (Jan - May)

5

0 200 400 600 800 1000 1200

€m

Fluidigm/ DVS

Oxford Instruments/Andor Technology

Integra Lifesciences/Surgical business

Microport Medical/Orthorecon business

Cardinal Health/AccessClosure

Accellent/Lake Region Manufacturing

bioMérieux/Biofire Diagnostic

Covidien/Given Imaging

GE Healthcare/Cell culture business

Smith & Nephew/Arthrocare

2014 top 10 deals (Jan - May)

A C L E A R WAT E R I N T E R N AT I O N A L T E A M R E P O R T

n Smith & nephew acquired ArthrocareCorporation, an innovative US company that

specialises in designing and manufacturing

surgical devices and implants for sports injuries,

for €1.1bn. the acquisition will enable Smith and

nephew to accelerate their strategy in

rebalancing the company towards higher growth.

the transaction was valued at 4.0x revenue.

n Ge Healthcare acquired thermo FisherScientific’s cell culture, gene modulation

and magnetic beads businesses for €782m.

the deal helps Ge expand and accelerate the

development of innovative technologies for cell

biology research, cell therapy and for the

manufacture of innovative biological medicines

and vaccines. the transaction was valued at

4.2x revenue.

n Covidien acquired Given Imaging, a developer ofinnovative swallowable imaging capsules for

endoscopy, diagnostic and monitoring technologies

for the digestive system, for €635m. the

combination of Covidien’s established global

presence and Given Imaging’s innovative capabilities

has the potential to transform this market. the

transaction was valued at 4.3x revenue.

n French company biomérieux acquired BiofireDiagnostics for €333m. Biofire is a US company

that develops, produces and markets a number of

automated molecular biology systems. the two

companies present strong strategic synergies,

especially in marketing, manufacturing and

innovation. the transaction was valued at 3.9x

revenue.

Notable key transactions so far in 2014:

† the above graph excludes the thermo Fisher / life technologies deal


the 10 largest transactions contributed to around

€18bn (71%) of total deal values in 2013, and

averaged a 6.0x revenue multiple and a 21.0x eBItDA

multiple. notable key transactions were as follows:

n Valeant pharmaceuticals acquired US opticalproducts manufacturer Bausch & lomb for

€6.7bn. the deal saw the integration of the two

companies’ ophthalmology businesses to create

a global eye health platform and allowed Valeant

to become a world leader in both dermatology

and eye health. the transaction was valued at

2.6x revenue and 12.1x eBItDA.

n Baxter International acquired Sweden-basedGambro, a dialysis equipment specialist, for

€2.6bn. the deal strengthened Baxter’s global

dialysis products offering by enhancing its

portfolio in the hemodialysis sector. the


n Apax partners acquired US-based one CallCare management, a diagnostic imaging and

electrodiagnostic company, for €1.7bn. the


n mcKesson Corporation acquired US-based pSSworld medical, a medical device equipment

wholesaler, for €1.7bn. the deal added extensive

distribution capabilities, technological expertise

and a broad portfolio of business services for

mcKesson in an expanding industry. the

transaction was valued at 1.1x revenue and

13.2x eBItDA.

n Cardinal Health acquired US-based Assuramed,a disposable direct-to-customer medical

supplies retailer, for €1.5bn. the deal expanded

Cardinal Health's ability to deliver cost-effective

solutions across the continuum of care,

broadening its product portfolio and scale. the


n Bayer acquired Conceptus, a US leader in thedesign, development, and marketing of

innovative solutions in women's healthcare, for

€839m. the transaction was valued at 7.8x

revenue.

2013 M&A highlights

CASE STUDY:

Stryker bets on robotics

Stryker Corporation’s €1.2bn acquisition of

mako, a pioneer in robotic arm assisted

surgery in orthopaedics, was a particularly

notable deal in 2013.

Founded in 2004, mako markets the rIo®

robotic Arm Interactive orthopedic

System and reStorIS® family of implants

to enable its flagship mAKoplasty partial

Knee resurfacing procedure for the

treatment of early to mid-stage

osteoarthritis.

Stryker has now combined this expertise

with its own innovations in joint

reconstruction and surgical instruments. It

says mako’s technologies have considerable

long-term potential in joint reconstruction,

and the combined expertise of the two

companies offers the potential to simplify

procedures, reduce variability and enhance

the surgeon and patient experience.

A C L E A R WAT E R I N T E R N AT I O N A L T E A M R E P O R T 7

0 1000 2000 3000 4000 5000 6000 7000 8000

€m

Valeant/Bausch + Lomb

Baxter/Gambro

Apax/One Call Care Management

McKesson/PSS World Medical

Cardinal/AssuraMed

Stryker/Mako

Bayer/Conceptus

Investor AB/Permobil

Stryker/Trauson

Mitsui/Heraeus Kulzer

2013 top 10 deals

Global medical equipment and supplies deals in 2013

0

5

10

15

20

25

30

35

40

num

ber

of deal

s

Jan Feb mar Apr may Jun JulJul Aug Sep oct nov Dec

� 2012 � 2013

In 2013, more than half of deals were in the followingsub-sectors: general equipment & supplies; disposableequipment & supplies; and patient monitoring equipment& therapies.

The majority of acquirers in 2013 came from the US, with 50% (142) of the deals. Buyers from France, the UKand Germany accounted for 14% (41) of the deals. Bycontrast, companies in emerging markets such as Chinaare still predominately acquiring inbound opportunities -as has been the trend in recent years. This continued focuson domestic companies can be linked to the stringentconditions implemented by the Chinese authorities.

Target acquisitions have been predominately located inthe US with 45% (127) of the deals. The UK, Germany,India and Canada accounted for 18% (52) oftransactions. The majority of Spanish targets wereacquired by domestic companies, showing furtherconsolidation in that market. Of late, Spain has not beena destination of choice for inbound cross-border activitydue to its sovereign debt and a public funding squeeze.However, the country is still attractive for businesseslooking for acquisition targets with strong export andinternational sales in regions where they have littleprescence or want to access key protected domesticservices and products.

The UK has grown as a source of interest foracquisitions with particular interest from the US, butalso interest from Denmark. For instance SSB acquiredTap Biosystems Group for €33m, a deal which allowsSSB to add depth to its upstream bioprocessing unitand benefit biopharma customers. Another deal sawDanish venture capital firm Lundbeckfond Venturesacquire DySIS Medical, a specialist in the detection ofcancerous and pre-cancerous lesions.


Who bought global medical equipment and suppliescompanies in 2013

In 2013, trade buyers remained the most active investors by volume with249 deals compared to 288 in 2012. By contrast, there were only 34 PrivateEquity (PE) deals in 2013 compared to 42 in 2012.

� General Equipment & Supplies

� Disposable Equipment & Supplies

� Patient Monitoring Equipment & Therapies

� Orthopaedic, Implant & Prosthetics

� Ophthalmic Goods, Optical Instruments & Lenses

� In Vitro Diagnostics, Equipment & Supplies

� Life Science Tools & Services

� Dental

� Cardiovascular

Sector breakdown split of deals in 2013 Geographic breakdown

0

50

100

150

200

250

300 288

249

4234

num

ber

of deal

s

trade pe

� 2012 � 2013

31%

14%

14%

11%

8%

7%

6%

5%4%

PE deal highlights

Investor acquired permobil for €610m. permobil

is a global leader in advanced powered

wheelchairs and has been transformed in recent

years from a family firm into an international

market leader. Focusing on the complex rehab

segment, every wheelchair is built to order and

custom-fit to meet the unique medical needs of

each individual. today the company exports to

more than 30 countries.

linden Capital partners acquired Young

Innovations, a manufacturer and marketer of

supplies and equipment used in the dentistry

sector, for €235m.


Global sector breakdown split of deals in 2013

0

5

10

15

20

25

30

35

50%

8%

4%4%

2% 2%2%

1%

27%

� US

� Other

� UK

� China

� France

� Germany

� Japan

� Sweden

� Netherlands

� US

� Other

� UK

� Spain

� India

� Canada

� Germany

� China

� Finland

Acquirer split 2013

45%

26%

8%

4%

4%

4%3%

3% 3%

Target split 2013

num

ber

of deal

s

Jan Feb mar Apr may Jun Jul Aug Sep oct nov Dec







� Ophthalmic Goods, OpticalInstruments & Lenses

� Dental

� Cardiovascular

� Neurovascular


M&A ActivityThe first five months of 2014 have seen a good levelof deal activity with 39 deals.

In 2013, deal activity dropped 18% with 142 deals inthe medical equipment and supplies sector comparedto 174 deals in 2012. Transactions above €600m madeup 78% and 58% of the total deal value in 2012 and2013 respectively. This has distorted the average dealsize, so in order to understand the underlying trend, wehave concentrated on deals below €600m.Interestingly, although the total volume of deals in thisarea decreased by 30% in 2013, average deal sizeactually increased by 28% in the same period.

Venture Capital (VC)An analysis of VC activity in the US, based onThomson Reuters data, reports that VCs spent €1.6bn on 308 medical device investment deals in2013 - a 17% fall in value and 4% drop in volume.

The drop has been blamed on a more rigorousregulatory climate which has added more costs tothe med tech industry, thereby making early-stageVC investments less common and less VC fundsavailable. The flux created by the much-publicised UShealth reforms have also affected spending onmedical technology.

In comparison, pharmaceutical and biotechnologyventure funding is on the increase with a highervolume of deals. There were 615 announced and/orclosed transactions involving targets in thebiopharmaceutical and diagnostic industry, versus 456the year before – an increase of 34%. This has beendriven by recent government schemes making iteasier for companies to list more easily and providean incentive for investors to realise value.


Total deals (with values disclosed) 2012 2013 2014 (Jan to May)




Deals less than €600m (with valuesdisclosed)

2012 2013 2014 (Jan to May)




Total deals 2012 2013 2014 (Jan to May)

US market


2014 highlights

notable deals below €600m so far this year:

n Accellent acquired lake region manufacturingfor €284m. lake region is a US manufacturer of

minimally invasive devices and delivery systems

to the cardiology and endovascular markets. the

deal creates a leading interventional vascular

business with more scale and a broader product

offering.

n Cardinal Health acquired AccessClosure, a USmanufacturer and distributor of extravascular

closure devices, for €230m. the acquisition will

broaden the company’s offering in physician

preference items. the transaction was valued at

4.0x revenue.

n Integra lifesciences acquired Covidien’sConfluent surgical business for €195m. the

acquired product lines include surgical sealants,

adhesion barriers and DuraSeal™. the deal

complements Integra’s global neurosurgery

growth strategy aimed at providing a broader

set of solutions for surgical procedures.

n Fluidigm acquired DVS Science, a Canadianmanufacturer and global distributor of

bioanalytical solutions, for €151m. For Fluidigm

the deal adds a high-parameter single-cell protein

analysis platform to its single-cell genomics

platforms to create a portfolio of advanced

technologies serving the rapidly growing single-

cell genomics and proteomics markets.

n Stryker acquired Berchtold, a German surgicalroom equipment maker, for €125m. the

company’s product line will complement

Stryker’s existing portfolio of operating room

equipment.

2013 highlights

notable deals below €600m in 2013:

n Carefusion acquired Ge Healthcare’s Vital Signsdivision in the US, China and other geographies,

for €367m. the acquisition doubled the size of

Carefusion’s specialty disposables business. the


n Kinetic Concepts acquired UK woundcarespecialist Systagenix wound management for

€354m, as part of its drive to diversify its

revenue streams and expand geographically. the


n Illumina acquired Verinata Health, a US providerof non-invasive tests for the early identification

of foetal chromosomal abnormalities, for

€348m. the deal strengthened Illumina’s

position in the reproductive health sector.

n Abbott laboratories acquired optimedica, a USprivately-held ophthalmic device company, for

€302m. the acquisition expands Abbott's vision

care business into the femtosecond laser-

assisted cataract surgery market.

n Argon medical Devices, a portfolio company of pefirm roundtable Healthcare partners, acquired

the interventional products business of Angiotech

pharmaceuticals for €281m. the company

manufactures and markets disposable and re-

usable biopsy, drainage catheter and vascular

interventional products.

0 50 100 150 200 250 300 350 400

€m

Carefusion / Vital Signs divisions

Kinetic Concepts / Systagenix

Illumina / Verinata Health

Abbott Laboratories / OptiMedica

Argon / Interventional products business

Heartware / Circulite

FMC / Epax

Linden Capital / Young Innovations

Abbott Laboratories / Idev

Cynosure / Palomar Medical

Boston Scientific / Bard Electrophysiology

CR Bard / Medafor

CR Bard / Rochester Medical

Teleflex / Vidacare

Medtronic / Cardiocom

St. Jude Medical / Nanostim

St. Jude Medical / Endosense

Assuramed / Invacare Supply

LVB Acquisition / Lanx

MedImmune / Amplimmune

2013 top 20 deals below €600m

US medical equipment and supplies deals in 2013


0

5

10

15

20

num

ber

of deal

s


� 2012 � 2013

US buyers acquiring overseas in 2013In total, 26% (37) of deals were overseas, with theUK, Germany and Canada the main points of interestfor strategic US buyers. Bar the acquisition of Trausonby Stryker in China, the most notable deals abroadoccurred in mainland Europe. Orthopaedic, implants& prosthetics, and patient monitoring equipment& therapies were the sub-sectors with the most deal activity.


18%

15%

11%

8%

7%

4%

4%3%

1%

29%

19%

16%

14%

8%

8%

8%

27%







� Cardiovascular

� Dental


� Neurovascular

� UK

� Germany

� Canada

� Israel

� Denmark

� India

� Other

Who bought US medical equipment and suppliescompanies in 2013

In 2013, trade buyers remained the most active investors by volume with123 deals compared to 153 deals in 2012. There were slightly fewer PEdeals during 2013, 19 compared to 21 in 2012.

0

50

100

150

200

153

123

21 19

num

ber

of deal

s

trade pe

� 2012 � 2013

Sector breakdown split of deals in 2013In 2013, 73% of deal activity occured in the generalequipment & supplies, patient monitoring equipment& therapies, and disposable equipment & suppliessub-sectors.

US PE deal highlights

Juniper Investment Company acquired

theragenics, a medical device specialist serving

the surgical products and prostate cancer

treatment markets, for €46m. the deal expands

Juniper’s breadth of offerings in its range of

surgical products businesses. the transaction was

valued at 0.8x revenue.

Goldman Sachs acquired Bpl medical

technologies for €21m. Bpl distributes products

such as electrocardiographs and defibrillators

through dealers across India.


the first five months of 2014 had a good level of deal activity with 34 deals.

In 2013, the level of deal activity dropped slightly to 105 deals in the medical equipment and supplies sector

compared to 111 in 2012. Deals above €600m made up 43% and 59% of the total deal value in 2012 and 2013

respectively. this has distorted the average deal size, so in order to understand the underlying trend we have

concentrated on deals below €600m.


Total deals (with values disclosed) 2012 2013 2014 (Jan to May)





2012 2013 2014 (Jan to May)




Total deals 2012 2013 2014 (Jan to May)

European market


2014 M&A highlightsNotable deals below €600m so far this year:

n MicroPort Medical acquired Wright MedicalGroup Inc’s Orthorecon business, a USmanufacturer of orthopaedic medical devices for€213m. The transaction will enable MicroPort tofocus on its core business improving salesproductivity and strengthen its competitiveness inthe global market.

n Oxford Instruments acquired Andor, a UKsupplier of high performance cameras,microscope systems and software for the physicalscience and life science industries, for €213m.Andor will spearhead Oxford Instruments’expansion into the nanobiotechnology arena. Thetransaction was valued at 2.7x revenue and 15.3xEBITDA.

n Maquet, part of the Swedish Getinge Group,acquired Pulsion Medical for €109m. Pulsion is a German provider of solutions foradvanced haemodynamic monitoring. The dealallows Pulsion to gain access to a significantlylarger sales footprint and will commerciallyreinforce Getinge’s recently introduced solutionfor continuous glucose and lactate monitoring.The transaction was valued at 4.0x revenue and8.7x EBITDA.

n Irish-headquartered Covidien acquired NewWave, the US manufacturer of a defogging heatedendoscopic lens protector system for €73m. Thedeal helps raise capital for the expansion andgrowth of the business. The transaction was valuedat 9.4x revenue.

n PE firm LDC acquired Prism Medical, a UKcompany that manufactures and provides specialistmovement and handling solutions, for €36m. Thedeal will help fund accelerated growth throughorganic expansion and strategic acquisitions. Thetransaction was valued at 1.2x revenue.

2013 M&A highlights

Notable deals below €600m in 2013:

n Elekta Medical acquired Nucletron, a Spanishmedical and orthopaedic products wholesaler for€378m. The acquisition is in line with Elekta’sambition of building a leading position in thecancer care market and enables it to expand itsreach and product offering in emerging marketssuch as Asia-Pacific. The transaction was valued at3.9x revenue.

n HemoCue was acquired by the RadiometerGroup for €231m. HemoCue develops andmarkets medical diagnostic products whichperform common blood and urine tests at thepoint of care. This acquisition will enable bothHemoCue and Radiometer to acceleratecompany growth and innovation in patient testing.The transaction was valued at 3.5x revenue and 18.4x EBITDA.

n bioMérieux SA acquired Aes Chemunex EspañaSA, a Spanish biotechnology research equipmentmanufacturer, for €190m. The deal allowsbioMérieux to reinforce its leading position inindustrial applications. The transaction was valuedat 2.6x revenue and 14.2x EBITDA.

n Roche Holding acquired US based ConstitutionMedical Investors, a developer of an innovativehaematology testing system, designed to providefaster and more accurate diagnosis of blood-related diseases, for €171m. The newhaematology capabilities will support Roche’sgrowth and strengthen its competitive position inthe laboratory haematology testing business.

n Alvimedica acquired Carbostent & ImplantableDevices, an Italian medical device companyoperating in the interventional cardiology sector,for €50m. The acquisition enables Alvimedica tofurther strengthen its position in the industrythrough product and brand recognition.


European medical equipment and supplies deals in 2013

0

5

10

15

20

25

num

ber

of deal

s


� 2012 � 2013

0 50 100 150 200 250 300 350 400

€m

Radiometer / Hemocue

Elekta Medical / Nucletron

bioMérieux / Aes Chemunex

Roche Holding / Constitution Medical

Ambu / King Systems

William Demant / Neurelec

Alvimedica / Carbostent & Implantable Devices

Össur / Teamolmed Nord

Grifols / ProgenikaBiopharma

2IL Orthopaedics / Corin Group

Smith & Nephew / Adler Mediequip

Ssb / Tap Biosystems

Life Sciences Partners / Lombard Medical

Trinity Biotech / IMMCO

K Care / Oxford Group

Spectris / NanoSight

Dcc Healthcare / Leonhard Lang

EMSA Capital / Żywiecka Fabryka

Lundbeckfond Ventures / DySIS Medical

Halma / Baoding; Langer Instruments



Sector breakdown split of deals in 2013

In 2013, more than 80% of deal activity was in thegeneral equipment & supplies; disposable equipment &supplies; in vitro diagnostics, equipment & supplies;opthalmic goods, optical instruments & lenses; andorthopaedic, implants & prosthetics sub-sectors.

European buyers acquiring overseas in 2013

In total, 24% (25) of deals were overseas, with the US,India, Canada and Brazil being the main points ofinterest for strategic European buyers. The US madeup 56% of these deals with India, Canada and Brazilaccounting for 24%.

8%

20%

56%

8%

8%

6%

2%

32%

14%

6%

7%

11%

11%

11%




� Opthalmic Goods, Optical Instruments & Lenses

� Orthapaedic, Implants & Prosthetics



� Dental

� Cardiovascular

� US

� Other

� India

� Canada

� Brazil

Who bought European medical equipment and suppliescompanies in 2013

In 2013, trade buyers remained the most active investors by volume with 88% of deals. There were slightly fewer PE deals during 2013, 13 compared to 15 in 2012.

0

20

40

60

80

100 9692

15 13

num

ber

of deal

s

� 2012 � 2013

trade pe

European PE deal highlights

2Il orthopaedics acquired Corin Group, a

leading designer, manufacturer and distributor of

orthopaedic products, for €35m. the deal

represented an attractive opportunity for 2Il due

to Corin’s brand position in the market and its

product portfolio, distributor network, customer

relationships, and potential as a platform for

further growth. the transaction was valued at

6.0x revenue and 9.9x eBItDA.

life Sciences partners acquired medical devices

company lombard medical technologies for €33m.

UKJudges Scientific acquired Scientifica, a specialistmanufacturer of electrophysiology equipment, for€15m. The acquisition is the largest made by JudgesScientific to date and is expected to be earningsenhancing with immediate effect. The transaction wasvalued at 1.4x revenue.

AngioDynamics Inc acquired Microsulis Medical for€12m. The medical device company specialises inminimally invasive, microwave ablation technology forthe coagulation of soft tissue. The transactionstrengthens AngioDynamics' position as the clearmarket-leading innovator in the growing global tissueablation market, with a complete offering of thermaland non-thermal technologies.

DenmarkDanish company Ambu acquired US-based KingSystems, an anaesthesia and airway managementdevices manufacturer, for €114m. The deal reinforcesAmbu’s market position in single use solutions for thehospital and emergency market. The transaction wasvalued at 1.9x revenue.

William Demant Holdings acquired Neurelec, aFrench cochlear implants developer, manufacturer andsupplier, for €58m. William Demant is one of theworld's leading players in diagnostic instruments. Thedeal was valued at 3.1x revenue.

GermanyBIT Analytical acquired Source Scientific, an in vitrodiagnostic and medical analytical instrumentcompany. The acquisition followed a planned five-year transition period, during which BIT owned 50%of the business.

Merz acquired the cosmetics, OTC, and Rx skincarebusiness of Swiss company Neocutis. The acquisitionstrengthens Merz’s presence in the US aestheticsmarket, especially as Neocutis’ skin care productscomplement the current portfolio of aestheticinjectable products. Merz also picked up anotherSwiss business, Anteis, which develops biomedicalproducts in the area of aesthetics. The two companieshave been working together for many years.

SpainPlasma products manufacturer Grifols acquiredProgenika, a specialist in the design and manufacture ofin vitro genome-based diagnostic tests, diseaseprognosis, and responses to pharmacologicaltreatment. Since 2010, Grifols has held globaldistribution rights to Progenika's blood genotyping testBloodChip®. Progenika also makes the PharmaChip®

for identifying genetic variants that impact drugmetabolism, and the LipoChip®, an array-based test fordiagnosing familial hypercholesterolemia.

Q Diagnostica acquired CRC Corporacion Sanitaria(Productive Unit), a medical imagery business, for €7m.


Country analysis


notable deals below €600m in 2013:

n mitsui acquired HeraeusKulzer, the dentaldivision of Heraeus Holding, for €452m. the

acquisition allows mitsui to significantly expand

its international activities in the dental sector.

the transaction was valued at 1.3x revenue.

n DHr Holding India pvt ltd acquired QuestDiagnostics India pvt ltd’s medical device

wholesaling business, a diagnostic testing service

company for €234m.

n mindray acquired Zonare, a US ultrasoundtechnology leader in high-end radiology, for €79m.

the deal strengthens mindray’s high-end ultrasound

r&D and US sales capabilities, furthering the

company's goal of becoming a leading global

provider of high-quality imaging products.

n photop technologies Inc acquired Aegislightwave Inc, a US based optical telecom

channel monitoring products manufacturer, for

€38m. the acquisition allows the company to

accelerate the sales of their market leading

optical channel monitors and fused fibre devices

in the global market.

n Samara acquired lotus, an Indian medicalconsumables manufacturer, for €30m. the deal

follows healthcare investments from Samara in

pharma chain Guardian and diagnostic services

provider thyrocare technologies.

one notable deal in 2014 saw Shinva medical Instrument acquire Vastec medical, a Hong Kong-based medical

instrument manufacturer, for €46m. this transaction will enable Shinva to strengthen its medical device business

in Hong Kong.

2013 saw 25 deals in the medical equipment and supplies sector, compared to 32 in 2012. Deals above €600m

made up 92% of total deal values in 2012. In 2013, there were no deals above €600m.

number of deals 32 25

Total deals (with values disclosed) 2012 2013


transaction value (€m) 2,658 1,061

Average deal size (€m) 116 51


2012 2013


transaction value (€m) 210 1,061

Average deal size (€m) 10 51

Total deals 2012 2013

Asian market


0 50 100 150 200 250

€m

Athanas / Claris Lifesciences

DHR / Medical Device Business

Mindray / Zonare Medical Systems

Photop / Aegis Lightwave

Samara Capital / Lotus Surgical

Comfort Enterprise / Ogawa World

Toyobo / Spinreact

Ascent Capital / Skanray

Shenzhen / Shanghai Hanguang Lab Equip

Changchun / Changchun Yuheng Optics

Sho-Bi / Melly Sighte Co

Benq Medical / Lily Medical

Changchun / Suzhou Weiyeda

Luyan / Goodman Medical

China Resources(CR) / CR Medical Instrument

Asahi Lite / Asahi Lite Optical

Zhuhai Hokai / Zhuhai Hongsheng Biological

Q & M Dental / Ar Dental Supplies

Body Organ / Aeon Astron Europe

Trauson / Jiangsu Chuangyi Medical


Asian medical equipment and supplies deals in 2013

0

1

2

3

4

5

num

ber

of deal

s


� 2012 � 2013


14%

43%14%

29%

� US

� Netherlands

� Denmark

� Spain

Asian buyers acquiring overseas in 2013

In total, 28% (7) of deals were overseas, with the USand the Netherlands the main points of interest forAsian buyers.

Sector breakdown split of deals in 2013

The majority of deal activity was in general equipment &supplies; ophthalmic goods, optical instruments & lenses;and disposable equipment & supplies sub-sectors.

Who bought Asian medical equipment and suppliescompanies in 2013

In 2013, trade buyers remained the most active investors with 23 dealscompared to 26 in 2012. There were two PE deals during 2013,compared to six in 2012.

0

5

10

15

20

25

30

26

23

6

2

num

ber

of deal

s

trade pe

� 2012 � 2013

Asian PE deal highlights

one deal saw Ascent Capital acquire Skanray, an

Indian company that manufactures radiology and

critical care products, for €18m. Ascent has

ambitious growth plans for the company and is

planning to set up units in Brazil and west Asia.

4%

36%

20%

12%

12%

16%





� Dental


Manufacturer of medicalproducts

Clearwater International advised thevendor on the sale to TG Eakin

pelICAn HeAltHCAre

Provider of safe patienthandling equipment

Clearwater International advisedNASDAQ listed Prism Medical onthe sale of its UK subsidiary to LDC

prISm meDICAl

UK’s leading provider of dentalproducts and services

Clearwater International advised thebuyer Synova Capital on theacquisition of the business

Market leader in special caretransport servicesin Denmark

Clearwater International advised thevendor on the sale to Catacap

HAnDICAp-BeForDrInGAnD ColUm-BUS

Supplier of single use anddisposable medical devices

Clearwater International advisedGraphite Capital on the sale to TheRiverside Company

SUmmIt meDICAl

Manufacturer of proteinpurification products used indiscovery and development

Clearwater International advisedUnilever on the sale to LifeTechnologies Corporation

BAC BV

Provider of products andsystems within healthcare andlife sciences industries

Clearwater International advised the buyer Getinge Group on theacquisition of Acare Medical Science Ltd

GetInGe GroUp

World leaders in femalesurgical contraception

Clearwater International advised thevendors, Barclays, on the sale to UtahMedical Products Inc

FemCAre

UK specialists in independentliving solutions

Clearwater International advised thevendor on the sale of DCC’smobility and rehab products divisionto Patterson Medical

DAYS HeAltHCAre

Leading stem cells processor

Clearwater International advised thevendors on the sale to Cord BloodAmerica

VIDAplUS

Leading Spanish medicaldistribution group

Clearwater International advised thebuyer Grupo Prim on the minorityacquisition of Scient’x

GrUpo prIm

Respiratory pharmaceutical/device products distributor

Clearwater International advised thevendors on the sale to DCC plc

neolAB


DentAl BUYInG GroUp

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