Yet another medtech unit falls to private equity

The acquisition of Thermo Fisher Scientific’s anatomical pathology business by PHC Holdings is the sixth multibillion-dollar purchase of a medtech company or business unit by a private equity-backed entity in the past three years. PHC, which is owned by the Japanese conglomerates Mitsui and Panasonic and the private equity group KKR, paid $1.1bn in cash for the unit, which makes products including microscope slides and laboratory instruments. PHC is also the owner of Ascensia, having bought the diabetes care unit of Bayer in 2015 for $1.2bn. There is solid strategic rationale for Thermo Fisher to sell the anatomical pathology business: this is one of the few areas in which the company lacks scale, competing in the market with Roche, Danaher and Agilent’s Dako business. The unit is also relatively slow-growing, with EvaluateMedTech’s consensus forecasting growth of 3% annually to 2024, versus 6% for the group overall. Thermo Fisher yesterday said its fourth-quarter revenues had risen 8%.

Top 10 private equity medtech purchases, 2015-19
Announced Acquirer Target Value ($bn) M&A focus
Jun 2018 Platinum Equity Lifescan subsidiary of Johnson & Johnson 2.1 Diabetes care
Jun 2015 Panasonic Healthcare Holdings, now PHC Diabetes care business of Bayer, now Ascensia 1.2 Diabetes care
Oct 2018 Astorg  Nemera 1.2 Drug delivery
Jan 2019 PHC Anatomical pathology business of Thermo Fisher 1.1 In vitro diagnostics
Apr 2018 Altaris Capital Partners Analogic 1.1 Diagnostic imaging
Apr 2018 Veritas Capital Value-based care division of GE Healthcare 1.1 Diagnostic imaging; healthcare IT
Source: EvaluateMedTech; company communications.

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