Medical devices

Second-hand $4 bln colostomy bag LBO may get messy

26 Mar 2019

Medical-kit maker ConvaTec’s value rose 9 pct after a report that buyout group EQT might be interested. Its shares are down a third since it was floated by private equity in 2016. A new owner could slash costs to rip out cash, but risks sacrificing more market share to rivals.

Smith & Nephew $3 bln spinal deal is a backbreaker

11 Feb 2019

The medical services group’s shares fell on a report that it may buy U.S. surgery specialist NuVasive. A takeover would take the company into a market it doesn’t know, and need years to pay off. New CEO Namal Nawana would do better to focus on smaller, less risky M&A.

Germany’s Fresenius needs credibility injection

7 Dec 2018

The 22 bln euro healthcare provider fell 15 pct after it warned of stagnant profit. Investing more in hospitals makes sense, but investors are smarting from past blunders, and need more clarity. With pressure from insurers to cut costs growing, a healthy valuation looks remote.

Colfax trades aging industry for aging Americans

19 Nov 2018

The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.

Smiths Group only partly lances its strategic boil

14 Nov 2018

The UK engineer is to hive off its medical arm. Creating daylight between the flatlining health unit and the faster-growing security and oil services bits could make it easier to sell. But unless Smiths can give more detail this looks more like buying time than creating value.

Flawed U.S. health gives Fresenius dual boost

7 Nov 2018

California rejected a plan to cap dialysis rates. A new Congress is also unlikely to curb the cost of U.S. healthcare. Both are good news for the likes of Germany’s Fresenius Medical Care, the world’s top dialysis firm – but less so for insurers and patients.

Holding: M&A’s big MAC attack headed for retreat

5 Nov 2018

If Boston Scientific manages to nix its $275 mln deal with Channel Medsystems, it’ll be only the second Delaware case of a buyer able to walk after a material adverse change. More likely the courts will toss both cases at trial or on appeal. The upside should be clearer rules.

ConvaTec investors brace for lengthy patch-up job

15 Oct 2018

The UK medical devices maker lost nearly 30 pct of its value after it warned of lower growth and its CEO resigned. The selloff seems excessive given modest changes to revenue and margins. The remedy could be cost cuts. But any turnaround will have to wait for a new chief.

Biotech starts Phase II Hong Kong market trial

13 Sep 2018

Diabetes drug developer Hua priced its shares at the bottom of the range, and halved the deal size. After peer Ascletis debuted last month to kick off an expected wave of IPOs from the sector, its value fell 50 pct. The success rate for this big experiment may be low for a while.

Healthscope’s property trick is takeover poison

22 Aug 2018

Having rejected two acquisition bids, the struggling Australian health group will put A$1 bln of hospitals into a trust in which it will sell 49 pct - then rent the facilities back. The cash will be useful, but operating costs and risk will rise, deterring more generous suitors.

Consumers offer Ping An cover from market storms

21 Aug 2018

The $160 bln conglomerate's first-half earnings rose by just over a third, thanks to life and health insurance. Market clouds present dangers for an insurer with lots of investments, but its results suggest Chinese households can provide some protection from the squalls.

China Biologic may be too rich for CITIC’s blood

19 Jun 2018

The plasma products maker received a $3.7 bln takeover bid from the Beijing-based bank’s buyout arm. CITIC offered a healthy 34 pct premium. It could capitalize on a market shakeout, but it’s hard to be sanguine about infusing a company with debt amid risky regulatory upheaval.

Medical device megadeals risk antitrust backlash

11 Jun 2018

Stryker is circling Boston Scientific for what could be a $58 bln takeover bid. Such a price tag wouldn’t be excessive by recent standards. But as more medical suppliers look for mergers to cut costs and gain leverage over hospitals, regulators will be tempted to step in.

WPP chairman has too many jobs

23 May 2018

An advisory group says the ad group’s shareholders should oust Roberto Quarta over his handling of CEO Martin Sorrell’s departure. That would be a mistake: his options were limited. But also chairing medical-device maker Smith & Nephew is a stretch. He should focus on one task.

Zoetis gives $2 bln vet deal luxury treatment

16 May 2018

The animal-health giant will on the face of it only get a 2 pct return on investment from buying diagnostics firm Abaxis. It’s betting more owners globally will shell out big bucks on their pets – and so fluff up earnings. If not, $40 bln Zoetis will be nursing a dog of a deal.

New Smith & Nephew boss hobbled by old injury

3 May 2018

Shares in the artificial hip maker dropped 6 pct after it warned of slower revenue growth and flat profit margins. Incoming CEO Namal Nawana inherits a good portfolio of products in promising markets. His most pressing task is to quickly to reverse S&N’s sickly sales record.

Smith & Nephew’s new boss has two rehab options

4 Apr 2018

CEO Namal Nawana has to revive mediocre top-line growth and slash costs at the artificial-knee maker. A flair for turnarounds should keep activist Elliott at bay for now. And the sale of the last company he headed shows an appetite for more drastic prescriptions when necessary.

Siemens’ slimming strategy is half-hearted

3 Apr 2018

A part-sale of medical unit Healthineers has failed to shrink the German company’s conglomerate discount. After all, the 84 bln euro group still spans trains, energy and factories. Siemens’ exit from the lighting and mobile businesses offers CEO Joe Kaeser a useful template.

SEC gives wrong Theranos lesson to Silicon Valley

14 Mar 2018

Elizabeth Holmes’ company raised $700 mln in a “massive” fraud that put patient lives at risk. Yet regulators are letting her escape with a slap on the wrist, and not admit guilt. The SEC says this is an important lesson for startups, but it shows how toothless the agency is.

Philips still waiting for valuation health-check

30 Jan 2018

The Dutch group has shed its consumer electronics legacy and now earns almost all its income from health technology. Low profitability means CEO Frans van Houten has yet to be rewarded with a valuation worthy of the sector. Full-year results for 2017 at least show he’s on track.