Medical Device Manufacturer

Situation and Challenge:

  • Seeking to increase sales rep productivity and provide cross-selling potential, a leading manufacturer of medical devices was considering two potential acquisitions
  • The company asked us to help evaluate the potential acquisitions –
    • A: An established market leader in an adjacent space
    • B: An emerging manufacturer with an innovative device in clinical trials

Approach

  • Conducted domestic and international primary research, supported by secondary analysis, to develop our fact base.
  • Gathered financial data and built a detailed model to allow projection of acquisition scenario outcomes and potential deal structure
  • Evaluated both acquisition targets and formed recommendations:
  • For target A –
    • The client’s reach and customer relationships would enable it to unlock significant value post-acquisition from with limited near-term downside risk
    • We estimated that cross-selling synergies would account for ~25% additional revenue, as compared to target A’s baseline revenues
  • For target B –
    • The company carried clinical outcome and reimbursement risk given its stage of development
    • Initial fears that it would cannibalize the client’s core business proved unlikely
  • We recommended engaging in discussions with both targets and provided a list of topics on which to focus during due diligence

Impact:

  • Client engaged with both targets for follow-on discussions focusing on key outstanding questions and topic provided from our evaluation

Assessment of Provider Overlap

Evaluation of Potential Revenue Synergies

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