In 2013, medtech mergers and acquisitions fell off the map a bit. Sure, they were still happening. Bayer's acquisition of Conceptus, Thermo Fisher's acquisition of Life Technologies, and Valeant Pharmaceuticals acquisition of Bausch & Lomb were among the important and large acquisitions that year. Nonetheless, after all the activity in 2012 including J&J's blockbuster acquisition of Synthes they didn't get nearly the same attention in 2013.
But in 2014, they came back with a vengeance. The Zimmer-Biomet deal rocked the ortho world, while in the background Smith & Nephew purchased ArthroCare, Wright Medical and Tornier merged, and Stryker acquired Small Bone Innovations. Danaher rocked the dental implant world with its acquisition of market leader Nobel Biocare, adding to its existing investment in leading dental implant company Implant Direct Sybron International. And the Medtronic-Covidien acquisition rocked, well, everything.
Acquisitions have always been a way for big medtech companies to grow, often completing smaller tuck-in acquisitions to complement what they do already and pick up new innovations. But acquisitions of this scale, the be everything to everybody approach, is newer. And truly, the tough environment in traditional strongholds like the US and Europe has a lot to do with this: scale and breadth are now ever more important for long-term company survival.
You might want to point out here that a lot of important divestitures also happened in 2014, such as J&J spinning off its Ortho Clinical Diagnostics unit. While this is true, it still looks to be headed in a bigger is better direction companies are ready to add significant scale, and then selectively spin off the slower-growing pieces.
All signs point to more major acquisitions of this sort. And it's also a self-fulfilling prophecy the more companies that exist of this size, the harder it is for the smaller guys to compete.
And so, our perspective on a big vs small medtech company is poised to get skewed upward. Who's next?