Private equity pitch: US medical equipment and services companies watchlist

Karl Freimuth recently spoke with Mergermarket about the robust dealflow in the medtech sector over the last year. The US medical technology sector is likely to experience continued lively deal flow this year. Large original equipment manufacturers are expected to continue to seek strategic advantage by acquiring new platform technologies, and private equity firms look to exit, dealmakers told this news service.

Some of the recent high-profile announced deals include:

  • Johnson & Johnson’s [NYSE:JNJ] purchase of Auris Health, a medical equipment maker, for up to USD 5.75bn this month
  • Colfax Corp’s [NYSE:CFX] deal to buy orthopedic device maker DJO Global from Blackstone Group [NYSE:BX] for USD 3.15bn in November 2018.
  • Aterian Investment-backed Vander-Bend Manufacturing’s agreement to purchase J.L. Haley Enterprises, a provider to such specialist areas as robotic surgery and radiation oncology, for an undisclosed price in January
  • MW Industries’ purchase of LaVezzi Precision, a precision medical components maker, from American Securities in April 2018 for an undisclosed price

“There is tremendous activity going on from a capital deployment and M&A perspective in the devices sector,” said Karl Freimuth, Chicago-based partner at Livingstone Partners, a global investment bank. Livingstone raised financing for the Vander-Bend acquisition and represented LaVezzi Precision in its sale.

“The M&A market was indeed white hot in 2018, and Livingstone expects premier medtech assets to be in high demand in 2019,” the firm said in a report, driven by “supply-demand imbalance of too few medtech assets available for sale in a market replete with an overabundance of acquisitive strategic and private equity suitors.”

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