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Consolidation Continues as Zimmer Intends to Acquire Biomet

“With consolidation happening across the healthcare industry, management teams seem to believe bigger is better,” Mike Matson, CFA, Senior Research Analyst of Needham & Company’s Medical Technologies & Diagnostics division wrote in his analysis of the acquisition. “Bigger med tech firms have cost advantages and are able to bundle products putting smaller companies (particularly those undifferentiated technologies) at a disadvantage.”

Zimmer Exhibit_3Among the industry’s larger players, Stryker and Smith & Nephew may also be negatively impacted as Zimmer surpasses them both in the ortho recon market. (See Exhibit 3.) The deal could also pressure them, and others, to get larger. Answers to many questions—effect on supply chain, employee downsizing, product elimination—will be realized in time. For now analysts have stated that, overall, the acquisition is good for Zimmer and for the industry, as device companies continue to adapt to a slowing market and a changing healthcare landscape pressured by costs, outcomes and its own consolidation.


 

 

Continue to read BONEZONE for the latest on how industry changes like this acquisition are effecting device manufacturing and the supply chain. How do you think this acquisition will impact the industry? Comment below or email This email address is being protected from spambots. You need JavaScript enabled to view it..

 
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MA9715 Revised

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