Cooper-Cook deal tops up a slow start for medtech buyouts

Medtech M&A might be heading for a downturn. Yesterday’s purchase by Cooper Companies of Cook Medical’s reproductive health business, for $675m up front, is the second biggest announced this year, putting 2022’s total so far at $2.7bn. This is quite a fall from last year: in 2021, up to February 8, deals worth $10.1bn had been signed. The other interesting aspect to this deal is its structure. The up-front fee will be followed by four annual instalments of $50m, which are not contingent on the achievement of milestones. This is reminiscent of the structure of a recent, rather larger, deal in biotech: last month Samsung Biologics bought out Biogen’s stake in their joint venture, Samsung Bioepis, for $1bn cash up front followed by $812.5m in 2023 and $437.5m in 2024. Perhaps these phased deals will become more popular as the year goes on and the stock market downturn continues. Stifel analysts noted that the deal is a geographic play – Cook’s largest fertility market is in Asia Pacific. As for Cook, it intends to retain the rest of its businesses and continue as a family-owned company; even after the divestment it remains one of the largest private medtech groups.