Completing its mega-merger with Covidien in January hasn’t stopped Medtronic from shopping. The company has struck five acquisitions already this year, including its latest purchases of Aptus Endosystems and CardioInsight Technologies (see table below).
But coming in at around $200m altogether – small fry compared with the $43bn spent on Covidien – the two buys demonstrate an increasing appetite for smaller bolt-on deals, which could be a sign of things to come for Medtronic. They also illustrate the company’s continued moves to provide an integrated offering, first signalled with its acquisition of the telehealth and patient services company Cardiocom in August 2013.
Aptus boasts anchoring technology for endovascular aneurysm repair, which can be used alongside devices including Medtronic’s Endurant and Valiant stent grafts. Meanwhile, CardioInsight is focused on heart mapping and has developed the Ecvue system, a vest that noninvasively produces images of the heart’s electrical activity, for example to localise arrhythmias. The device could therefore allow more targeted use of Medtronic’s pacemakers and other implantable cardiac devices.
Both new acquisitions will join the medtech giant’s cardiac and vascular group, its biggest franchise with $9.4bn in sales in fiscal 2015. CardioInsight will become part of the $5bn cardiac rhythm and heart failure business, and Aptus will be integrated into the $1bn aortic and peripheral vascular unit.
|Medtronic acquisitions in the past 12 months|
|Company||Speciality||Financial terms||Date announced|
|Aptus Endosystems||Endovascular aneurysm repair||$110m||June 2015|
|CardioInsight Technologies||Heart mapping||$93m||June 2015|
|Sophono||Hearing implants||Undisclosed||March 2015|
|Diabeter||Diabetes clinic||Undisclosed||April 2015|
|Advanced Uro-Solution||Neurostimulation for bladder control||Undisclosed||February 2015|
|Sapheon (acquired by Covidien)||Venous disease treatments||Undisclosed||August 2014|
|NGC Medical||Hospital services||$350m||August 2014|
|Sapiens Steering Brain Stimulation||Neurostimulation||$200m||August 2014|
|Reverse Medical (acquired by Covidien)||Vascular embolization devices||Undisclosed||August 2014|
|Visualase||Neurosurgery||$70m plus $35m milestones||July 2014|
The Aptus deal adds to another aneurysm investment earlier this month, when Medtronic ploughed an undisclosed amount into Arsenal AAA, which is developing a foam to be used alongside an endograft during aneurysm repair – it is designed to fill the sac around the device, reducing the risk of leaks. The agreement includes an option eventually to acquire Arsenal.
As well as outright acquisitions, Medtronic has been busy striking other deals this year, with a rash in diabetes, currently a smaller slice of the firm’s pie. In June it said it was teaming up with Samsung in the space, not long after buying the Dutch diabetes clinic Diabeter and making a string of investments that included a partnership with IBM involving its Watson super-computer (IBM collaboration is Medtronic's fifth diabetes deal in a month, April 14, 2015).
So smaller buys and partnerships look set to make up the majority of Medtronic’s deal-making activity, at least in the near future. Indeed, it is difficult to see which other big medtech players Medtronic could acquire, given the potential anti-trust concerns – unless it wants to get into a brand new area such as in vitro diagnostics or diagnostic imaging. But, with the firm’s voracious appetite, even that might not be too surprising.