Reflecting back on the year 2015 as the new year approaches, 2015 was a strong year for M&A activity, with a lot of marriages and wedding notifications I received in my email inbox. According to Deloitte’s 2015 M&A Trends Report, there has been a surge in merger and acquisition activity since the global economic crisis in 2008, and the majority of corporate respondents anticipated acceleration of M&A activity in 2015. Furthermore, the health care sector ranked as one of the top sectors for M&A activity in 2015. As companies gain strong interest in expansion overseas and competition rises, they are readily investing and actively pursuing mergers and acquisitions as a strategic growth path.
In the dental space, last year ended with Danaher acquiring Nobel Biocare in December 2014. Since then, there have been several acquisitions among the leading competitors in the dental market. In April, Straumann completed full acquisition of Neodent, Latin America’s leading dental implant company, by increasing its ownership from 49% to 100%. The two companies showed synergy by merging certain activities and extending their positions in the global dental market. In April 2014, Zimmer announced its $14 billion deal to acquire Biomet, and closed its transaction in June 2015, forming a new name, Zimmer Biomet. Zimmer and Biomet are located in the same town and expect to generate cost savings of over $130 million through this merger. Both companies are dominant players in the orthopedic market, but their dental subsidiaries, Zimmer Dental and Biomet 3i, are affected by this merger as well. Last but not least, Dentsply and Sirona’s merger agreement in September created the largest dental products manufacturer in the world. This merger brings a positive outlook on the dental market as it will allow the implant manufacturer Dentsply to combine with Sirona’s expertise in digital dentistry to create product development synergies that will rapidly revolutionize dentistry.
In the aesthetic space, the saga of Valeant Pharmaceuticals’ takeover of Allergan finally ended when Allergan agreed to be bought by the white knight, Actavis. Actavis then changed its name to Allergan 3 months after the transaction. Then, just last month, Pfizer and Allergan (formerly Actavis) announced the largest historic deal in the health care sector, creating the world’s biggest drug maker, valued at $160 billion. Although the corporate tax inversion deal led to much controversy, the combined company will not only benefit from its tax savings by moving its headquarters to Ireland, but will also be able to maximize its scale of business with diversified payer groups and greater resources to invest in R&D. Most recently, Galderma - a global leader in skin aesthetics - and Zeltiq, the current number one non-invasive fat reduction device company, announced collaboration in the US aesthetic market. The two companies will bring together face and body aesthetic solutions to better serve healthcare professionals.
That pretty much sums up the major M&A activities in the dental and aesthetic markets in 2015. A corporate merger is like planning a wedding, and the overall success of the merged companies will depend on how well they survive after their honeymoon phase. In the end, we realize that no matter what we plan for, life does not always deliver what we expected.