Two more medical equipment deals
The medical equipment sector, led by such giants as GE and Siemens, is heating up with a seething acquisition frenzy. Te latest two deals are big ones, as one after another smaller companies, even mid-size ones, get swallowed up.
First, US-based Cardinal Health announced it would buy US-based Viasys Healthcare for $1.5 billion. Cardinal Health is the #2 distributors of pharmaceuticals to hospitals and pharmacies in the US (after McKesson). It also is a major supplier of intravenous systems used in hospitals, as well as a whole range of supplies including gloves, rolling supply systems, and scrub stations. Viasys sells respiratory equipment used in hospitals, as well as other diagnostic equipment. Cardinal already has a smaller segment of respiratory treatment market.
Founded in 1971, Cardinal is addicted to acquisitions. It bought Alaris Equipment in s similar deal in 2004, also for about $1.5 billion. Alaris sold drug delivery systems to hospitals as well as patient software. It has acquired over 25 healthcare firms over the past decade. It also recently sold off its Pharmaceutical Technologies and Service group for over $3 billion to private equity company Blackstone Group. That group packages and manufactures pharmaceuticals for drug companies.
Reportedly, the deal will give Cardinal, which has most of its business in the US, a strong international position. Over 40% of Viasys sales are international.
Second, US-based Hologic, a maker of mammogram and osteoporosis detection equipment announced it is buying US-based Cytyc, which makes equipment for screening cervical cancer. The deal, which makes for a powerhouse in gynecology, was for a whopping $6.2 billion.
Medical equipment is an increasingly concentrated business and a profitable one. In both these cases, it's a matter of matching extended product lines with extended sales presence.
Other recent deals include
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