Several categories within the medical devices market are growing at a rapid rate and catching the eyes of investors, says James Knott of Catalyst Corporate Finance, based in London. Minimally invasive surgery (MIS) gets especially high marks from the consultancy.
MIS devices are high on the agenda for a raft of the world’s largest healthcare companies, who are investing heavily in developing and acquiring new technologies, according to Catalyst Corporate Finance. US-based CR Bard Inc.’s 2011 acquisition of ClearStream Technologies Group plc, a developer and manufacturer of MIS devices, at almost 2.5x revenue, demonstrates an appetite to pay premium multiples for the right asset, says Knott. The benefits of MIS for patients (faster recovery times, smaller incisions) as well as payers (shorter hospital stays) is driving growth, which is forecast to continue for at least the next five years.
Private equity investors typically seek to invest for three to five years, and this subsector of the medical devices market is likely to attract their attention in the next 12 to 24 months, according to Knott. Large global players such as GE Healthcare Ltd, Becton Dickinson UK Ltd and Smith and Nephew plc are always looking to add innovative new technologies—acquisitions often are more cost effective than in-house development.
“This is definitely a market worth following for investors interested in the healthcare space and for those looking to expand or thinking of selling this is the time to be looking at your options,” adds Knott.