M&A Strategy in the New Medtech Environment
Facing Lower Growth and Profit Pressures, Medtech Companies Look to Dealmaking to Deliver Cost Cuts, Innovation, and New Customers, BCG Says
(firmenpresse) - CHICAGO, IL -- (Marketwire) -- 09/04/12 -- Medical-technology companies are facing a rapidly changing environment. Pricing pressure is mounting in developed markets. Innovation productivity is declining while regulatory and market access barriers are increasing. In turn, only true breakthrough innovations are creating better margins. At the same time, emerging markets are growing rapidly, but established companies are finding that their product lines and distribution capabilities are not well positioned to capture this growth. Further, emerging-market companies are becoming more successful outside their home markets and are selectively creating low-cost offerings for developed markets.
In this environment, what role should M&A play in a medtech company's strategy? Look for successful medtech companies to make significant use of M&A and to do so in novel ways in order to meet these new challenges, according to a new report from The Boston Consulting Group. The report, M&A in Medtech: Restarting the Engine, is being released today.
Competition for the best deals will be intense, however. Not only must device makers contend with other potential acquirers in their own industry, they will often have to bid against private-equity firms -- as well as pharmaceutical and electronics companies seeking growth in adjacent markets. Surveying the past five years of global dealmaking in the medtech industry, BCG identifies the motivations that have driven these dealmakers, highlights the forces likely to drive dealmaking in the future, and offers tips on target selection and acquisition strategy.
"Most M&A activity in medtech in the past five years had two motivations: consolidate the segments we're in and extend the portfolio into attractive and related segments. Sound logic generally. But the focus was on growth, while cost synergies were an afterthought, if a thought at all," said Colm Foley, a partner at BCG and a coauthor of the report. "Successful acquirers will adapt this approach, seeking to build scale and advantage across the entire value chain. The bar will be higher in terms of achieving successful integrations."
Emerging-market M&A will also pose its own unique challenges. "While emerging-market transactions have been small in number and size in the past, we see this changing as established companies seek the right distribution, local capabilities, and product lines for these growing markets. Companies must be able to develop and sell products at lower price points and match the local clinical practices. Acquisition is a viable path to gain these capabilities," said Foley.
A copy of the report can be downloaded at .
To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or .
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 77 offices in 42 countries. For more information, please visit bcg.com.
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Datum: 03.09.2012 - 22:01 Uhr
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