5 largest medical device M&A deals of 2011

In 2011, the medical device sector posted a total of 170 deals, according to Deal Search Online, the M&A database from Irving Levin Associates. And according to revealed prices, 2011 had a grand total of $63.5 billion in medical device merger and acquisition transactions. 

We delved a bit deeper into the five largest medical device M&A deals of 2011, as outlined by Irving Levin Associates. 

1. Johnson & Johnson acquired Synthes GmbH. Back in April, Johnson & Johnson acquired Synthes, Inc., a global manufacturer of orthopedic devices,  to the tune of CHF159 per share, or $21.3 billion. The transaction is still expected to close during the first half of this year, and as a result, Synthes and the DePuy Companies of Johnson &Johnson will become the largest business within the Medical Devices and Diagnostics segment of the company. "DePuy and Synthes together will create the most innovative and comprehensive orthopedics business in the world and enable us to better serve clinicians and patients worldwide," said Bill Weldon, chairman and CEO of Johnson and Johnson. 

2. Danaher acquired Beckman Coulter.  In February of last year, Danaher acquired medical diagnostic manufacturer Beckman Coulter. The deal, valued at $6.8 billion, included debt assumed and net of cash acquired. Beckman Coulter became part of Danaher's life sciences and diagnostics segment, joining its new partners Leica, AB Sciex, Radiometer, and Molecular Devices. "The premium paid by Danaher far exceeds recent IVD deals, which surprised many in the industry, including speculators and Beckman's equity analysts," said Jon Vance, director and head of medtech investment banking at Avondale Partners. "Danaher is clearly confident that it can resolve Beckman's current regulatory and management issues, but more importantly, that it can quickly leverage channel synergies and extract operating costs to increase combined earnings per share."

[See also: Mergers gone wrong.]

3. Apax Partners acquired Kinetic Concepts. In July, Apax Partners acquired Kinetic Concepts Inc., a medical device company focusing on the design, manufacturing, marketing, and service of therapies and products for the wound care, tissue regeneration, and therapeutic support system markets. The transaction was valued at $6.3 billion, which included KCI's outstanding debt. In 2012, KCI reported revenues of $2.0 billion. "Over the years, we have reviewed multiple investments in the medical devices and products industry, having originally identified it as a key growth sector within our overall healthcare investment practice," said Buddy Gumina, partner and co-head at Apax. "Based on this experience, we possess a deep understanding of KCI's business and the markets in which the company operates."

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