VC Investments and Medical Device Mergers Prominent Throughout October
November 13, 2014
By Aneel Dhaliwal

The month of October not only brought us the beginning of the Autumn season, ghosts and ghouls, and surprisingly warm weather, but it also brought the medical device world into greater focus, what with an influx of investments from venture capitalists as well as new and on-going mergers.

As far as VCs go, it looks like their pocket books continue to show significant interest in the medical device space. Cognoptix, a small medical device company specializing in an eye test for diagnosing Alzheimer’s disease, received $15M in Series D financing from Alopexx, Inventages, and Launchpad Venture Group. Pregnancy startups Glow and Bellabeat both raised $17M and $4.5M respectively from top VCs. And making its presence known, Google, as well as KKR and Kleiner Perkins, invested $542M in Magic Leap, which is developing virtual-reality goggles that project two separate images onto the eyes and which could provide a new interface for patient-doctor communication. While these may be some of the hot new start-ups garnering attention from VCs, Telcare, Respicardia, and Gamma Medica are some more to name a few.

As the new-comers in medical device are making their rounds with VCs, some of the established companies are setting their sights on the fun trend of “mergers”. A recent report by Evaluate MedTech found that M&A deal value in the med tech sector grew by 363% year over year in the first half of 2014 to $30 billion. One of the biggest deals to come is between Covidien and Medtronic, with Medtronic funding its $43 billion acquisition of Ireland’s Covidien using $16 billion in external financing. Becton Dickinson is in the midst of acquiring CareFusion with a $9.1billion bridge loan. Steris, a company specializing in sterilization and infection prevention products, will acquire Synergy Health in a cash and stock deal worth about $1.9 billion. With many of these mergers, a lower tax rate has been the incentive. For example, with the Steris/Synergy merger, the acquisition is expected to lower the combined company’s fiscal tax rate to 25% in fiscal 2016 from the current 35% since Steris’ HQ is in Ohio and Synergy’s is the United Kingdom.

With the holiday season coming into full swing, it will be interesting to see how the medical device landscape will fare in the November/December months, as far as determining who will be naughty and who will be nice. If you’re as interested as we are, be sure to visit our Neozene blog regularly to keep up to date on all things medical device!

Aneel Dhaliwal, Consultant at Neozene

Aneel is one of Neozene’s many recruiting consultants working with candidates and clients alike within the medical device and biotech space in the Bay Area. She received her B.A. in Political Science and Media Studies from University of California, Berkeley.

To learn more about Neozene and our services, call us at 510-746-8693.

(Image courtesy of ratch0013 at FreeDigitalPhotos.net)