The medical-device market has been hot with merger and acquisition action in recent weeks, with potential buyouts of orthopedic-product makers DJO and Biomet solidifying, and a long-anticipated purchase falling apart of Abbott Laboratories in-vitro and point-of-care diagnostic businesses.
Orthopedic devicemaker ReAble Therapeutics, Austin, Texas, jumped into the dealmaking with its announcement July 16 that it planned to buy orthopedics products company DJO, located in Vista, Calif., for $1.6 billion. The acquisition would combine complementary orthopedic rehabilitation and pain-management products, allowing for broad-market coverage and an expanded sales force. Standard & Poors analyst Jesse Juliano characterized the deal as a good move for ReAble in an S&P written statement.
The Blackstone Group has its hands in the DJO acquisition. The asset-management company, which is ReAbles controlling shareholder, is set to finance the $1.6 billion DJO purchase. Earlier in the month, General Electric Co. said it would not follow through with an $8.13 billion purchase of in-vitro and point-of-care diagnostics businesses owned by Abbott.
The deal collapsed when the two companies were unable to agree on final terms of the transaction, according to both GE and Abbott. But in a report issued by Cowen & Co., analysts noted GE had received negative feedback from investors regarding the proposed price offered to Abbott stockholders.
Performance of the unit was not an issue, wrote analysts Sara Michelmore and Doug Schenkel.
Biomet, Warsaw, Ind., had better luck with a buyout deal that would take the publicly traded company private. The private equity group LVB Acquisitions (owned by affiliates of the Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG, as well as Dane Miller, Biomets former chief executive officer) offered to pay shareholders $11.4 billion for their Biomet stock. Eighty-three percent of shareholders accepted the offer, according to a July 12 announcement, and Biomet officials said the deal should close by year-end.