Sometimes medtech acquisitions are prompted when groups consolidate as a defence against difficult market conditions; Smith & Nephew’s purchase of Integra Lifesciences’s extremity implants last month was arguably one such. But sometimes the opposite occurs, with a buyer targeting technologies in high demand. Steris’s swoop on Key Surgical for $850m is one of the latter. Part of Chicago-based investor Water Street Healthcare Partners’ portfolio, Key Surgical is, like its new owner, focused on sterilisation. It offers devices used in operating theatres as well as protective equipment such as face shields, masks and gloves, for which there is an obvious and pressing need. Financed with debt and cash, the deal is set to close by the end of the year and be accretive to top-line growth, margins and earnings, Steris says, with Key Surgical expected to see revenue of around $170m and adjusted EBIT of $50m this year. The deal also comes with an tax benefit which ought to reduce the effective purchase price to around $810m. More pandemic-inspired deal-making might be welcomed by bankers: though the Key Surgical acquisition is worth less than $1bn it is still the fifth biggest announced so far this year.
|Top 5 medtech M&A announced in 2020|
|Aug 5||Teladoc Health||Livongo||18,500||Digital health|
|Aug 2||Siemens Healthineers||Varian Medical Systems||16,400||Diagnostic imaging|
|Sep 20||Illumina||Grail||8,000||Diagnostic imaging|
|Jun 22||Invitae||Archer DX||1,400||In vitro diagnostics|
|Oct 6||Steris||Key Surgical||850||General hospital & healthcare supply|