Natus goes private for $1.2bn

At $1.2bn, the sale of Natus Medical to Archimed is the largest private equity acquisition in the device space so far this year, just pipping IBM’s divestment of Watson Health to Francisco Partners in January. Archimed does not seem to have paid over the odds – the $33.50 cash per share offer comes in at a 29% premium to the closing price on April 14. But Natus, which makes devices to screen infants for hearing impairment as well as other neurological disorders such as epilepsy, has had a rocky time over the past decade or so; its revenue growth has been bumpy and it has been lossmaking for four of the past five years. Moreover, thanks to the logistical woes plaguing the medtech sector, Natus said it had been hit by $3.4m of “extraordinary supply chain costs” when trying to get hold of semiconductors. With that in mind, the takeout is a bit of a coup for the group’s chief executive. Tom Sullivan has only been in place since December and initially planned to restructure Natus in an attempt to push annual revenue growth to 5% or more. A clean takeout could prove palatable to shareholders. 

Top 5 private equity medtech deals of the past 5 years
Announcement Date Acquirer Target Value ($bn) Focus
Nov 2018 Veritas Capital & Elliott Management Athenahealth 5.7 General hospital & healthcare supply; healthcare IT
Aug 2021 TA Associates Smiths Medical subsidiary of Smiths Group 2.3 Anaesthesia & respiratory; patient monitoring 
Jun 2018 Platinum Equity LifeScan, subsidiary of Johnson & Johnson 2.1 Diabetes care
Apr 2022 Archimed  Natus Medical  1.2 Patient monitoring 
Jun 2018 CDH Investments Sirtex Medical 1.1 Radiology
Source: Evaluate Medtech, company websites.

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