Companies are merging in the device industry, as this white paper outlines.

1. W H I T E P A P E R
Med Device Market Growth
Driven by Acquisitions
With modest revenue growth in the medical device market, perhaps 3 to 4% annually, it should be no surprise that
companies are merging to build revenue growth and present combined offerings to hospital and physician customers. The
global market for medical devices was $360 billion dollars in 2014 according to estimates from Kalorama’s latest report
on the market. While this is a large market there are limits to growth which could be challenging. In Europe as well as
the United States, reimbursement changes and the threat of new
legislation loom. In the United States, the third year of collections on
the medical device tax began. Emerging markets again helped to boost
sagging revenues elsewhere, but even some emerging nations are not
growing according to expectations.
In 2014 and early 2015, key market players were active in
acquiring companies, among these were Boston Scientific, Stryker
Corporation, CareFusion, Thermo Fisher Scientific, The Carlyle Group,
and Medtronic. Stryker’s purchase of MAKO Surgical, Zimmer’s
purchase of Biomet and the sale of J&J’s Ortho Clinical Diagnostic
Group to The Carlyle Group were among the larger purchases. In an
effort to boost their market share in an increasingly competitive market,
medical device companies have been very active with acquisitions. Some companies are clearly using multiple
acquisitions to obtain access to technology or markets, some acquiring to establish themselves in emerging markets. In
2014 and early 2015, key market players were active in M&A; among them Becton Dickinson (BD), CareFusion,
Medtronic, Covidien, Zimmer, Biomet, Thermo Fisher and Life Technologies. Several segments of the medical device
market were also particularly active in this timeframe, including neurostimulation, orthopedics, infusion pumps, patient
monitoring and IVD at point of care. These companies and segments are discussed in some detail below. Kalorama’s
report contains a fairly comprehensive listing of the mergers and acquisitions that
occurred in the medical device market in 2014 and early 2015.
BD ACQUIRES CAREFUSION
In October 2014, it was announced that Becton Dickinson (BD) would
acquire CareFusion for $12.2 billion, a strong strategic move to create a powerful
50
100
150
200
250
300
350
400
450
2014 2015 2016 2017 2018 2019
368 381
394 408
424
440
GLOBAL DEVICE MARKET $(bn)
FROM KALORAMA
INFORMATION’s
The Global Market
for Medical Devices,
6th
Edition

2. medical device company with a full spectrum of offerings, a leader in medication management and patient safety
solutions. BD is a medical equipment company that manufactures and sells medical devices, instrument systems and
reagents. Their products include needles and syringes, intravenous catheters, safety-engineered and auto-disable devices,
pre-fillable drug delivery systems, prefilled IV flush syringes, insulin syringes and pen needles, regional anesthesia
needles and trays, surgical blades and scalpels, ophthalmic surgical instruments, and critical care products.
Once a division of Cardinal, CareFusion was spun off in 2009. Globally, CareFusion’s clinically differentiated
and established brands are used by hospitals in more than 120 countries. CareFusion receives the majority of its revenue
from infusion systems and respiratory technologies.
The combination of the two companies’ complementary product portfolios will offer integrated medication
management solutions and smart devices, from drug preparation in the pharmacy, to dispensing on the hospital floor,
administration to the patient, and subsequent monitoring. The combination will improve quality of patient care and
reduce healthcare costs by addressing unmet needs in hospitals, hospital pharmacies and alternate sites of care to increase
efficiencies, reduce medication administration errors and improve patient and healthcare worker safety. In addition, the
company will have solid positions in patient safety to maximize outcomes in infection prevention, respiratory care, and
acute care procedural effectiveness.
MEDTRONIC ACQUIRES COVIDIEN
In June 2014, Medtronic announced the pending acquisition of Covidien, the biggest transaction in medtech
history. The transaction brings together the fourth-largest and eighth largest medtech companies with combined revenues
of over $27 billion, rivaling J&J’s leadership. Medtronic will have a broader product line to compete more effectively.
Covidien's business segments include medical devices, pharmaceutical products, imaging solutions, and medical
supplies. Medical devices accounted for the majority of Covidien sales with over 80% of net sales in 2014. Medtronic
announced on January 26, 2015 that it had successfully completed the previously announced acquisition of Covidien . The
transaction is valued at approximately $49.9 billion. Under the terms of the acquisition agreement, Medtronic, Inc. and
Covidien are now combined under Medtronic .
Medtronic has its principal executive offices in Ireland, where both companies have a longstanding presence. The
company's operational headquarters will continue to be based in Minneapolis. Moving its corporate operations to Ireland
with the acquisition of Covidien, should improve the company’s tax status.
Medtronic has remained competitive with many acquisitions. The company believes that it will remain successful
by increasing market position, increasing sales and developing and launching new products. Medtronic has a
comprehensive product portfolio, a diversified growth profile and broad geographic reach, with more than 85,000
employees in more than 160 countries.

3. ZIMMER ACQUIRES BIOMET
In May of 2014, Zimmer announced the acquisition of Biomet Inc. for $13.35 billion. Biomet is based in the
United States but has a focus on orthopedics from its European headquarters in Dordrecht, Netherlands. The acquisition
would solidify Zimmer's position as the world's second-largest seller of orthopedic products behind Johnson & Johnson, a
huge step for Zimmer. The resulting merged company would increase its presence in the trauma and fixation space among
others. Biomet has been a strong competitor of Zimmer and this would allow Zimmer to strengthen its musculoskeletal
product portfolio.
Finalization of the transaction is subject to approval by the EU antitrust regulators; the regulators have set a May
26, 2015 deadline for the deal. European Union antitrust regulators will decide by then whether to approve Zimmer’s bid
for Biomet after Zimmer modified concessions to allay competition concerns. Zimmer did not provide details of its
revised concessions but said they were generally consistent with the initial package. If the acquisition is approved the new
company will be known as Zimmer Biomet. The new company will have three business units and three geographic
locations including Americas, EMEA and Asia Pacific.
THERMO FISHER ACQUIRES LIFE TECHNOLOGIES
In February of 2015, Thermo Fisher finalized its acquisition of Life Technologies for approximately $13.6 billion.
The acquisition of Life Technologies will impact various IVD-related businesses for Thermo Fisher Scientific. Clinical
market-oriented product lines from Life Technologies include Invitrogen antibody
and cytokine reagents; magnetic beads; Molecular Probes’ analyte-specific reagents
(ASR); Zymed IHC and ISH reagents; Applied Biosystems’ PCR instruments, PCR
test kits; and transplant diagnostic kits and reagents. Life Technologies is
anticipated to add $350-400 million in IVD revenue to Thermo Fisher Scientific.
Through its various acquisitions in recent years, Thermo Fisher has added to
an already expansive portfolio of IVD products. The company also distributes third-
party IVD products; various laboratory consumables and disposables; and provides services to laboratory clients. Thermo
Fisher’s revenue exposure to healthcare markets and clinical diagnostics far exceeds its actual in-house IVD product sales.
Thermo Fisher offers IVD products and technologies in clinical chemistry, immunoassays (with a specialty in
autoimmune disorder and allergy immunodiagnostic testing through its acquisition of Phadia), microbiology (including
media, sera and rapid test kits), histology, transplant diagnostics (including molecular and immunodiagnostic products),
and molecular diagnostic test kits, reagents and instrumentation through Life Technologies.
Many more acquisitions are covered in Kalorama’s Global Market for Medical Devices, 6th
Edition.
FROM KALORAMA
INFORMATION’s
The Global Market
for Medical Devices,
6th
Edition

4. The Global Market for
Medical Devices, 6th
Edition
http://www.kaloramainformation.com/Global‐Medical‐Devices‐8983360/
The publication of the sixth edition of Kalorama Information’s As part of its market analysis, Global Market for Medical Devices includes
discussion of:
• Total Medical Device Market 2014‐2019
• Health Expenditure as Share of GDP, Select Countries
• US Market Forecast, 2014‐2019
• Device Regulatory Overview
• Hospital Trends
• Significant Country Device Markets (United States, Japan, Germany, China, France,
United Kingdom, Italy, Spain, Chile, Canada, Australia, Mexico, South Korea, Turkey, Brazil)
• Estimated Revenues of Medical Device Market by Competitor
The Global Market for Medical Devices examines specific device markets, describing trends and major companies in many fields. The report
addresses device category segment markets, including the following:
• Wheelchairs
• Defibrillators
• Pacemakers
• Advanced Wound Care Devices
• Catheters
• Gastrointestinal Devices
• Patient Monitoring
• Ultrasound and MRI
• Hip and Knee Implants
• Medical Beds
• X‐Ray and Digital X‐Ray
• Infusion Pumps
• Point of Care Tests
• Respiratory Devices
The report discusses “bellwether companies.” Kalorama has isolated 15 bellwether companies based on revenues and also diversity of medical
devices produced, so that changes merely in one area of devices have a mitigated impact on the industry forecast. Bellwether companies are
Johnson and Johnson, GE Healthcare, Medtronic, Philips, Boston Scientific, Becton Dickinson, Stryker, St. Jude Medical, B. Braun, Siemens,
Hill‐Rom, Smith & Nephew, Covidien, CareFusion, Fresenius Medical. There are many estimates of the medical device market as a whole that
have been published using various methodologies – export and import sales, unit estimates and price averaging – but Kalorama Information
considers estimates of manufacturer revenues the most important and valid methodology for business planning. In many of the largest device
markets, Kalorama Information has already conducted studies and has examined manufacturer revenue estimates, rendering the total market
visible. This report was assembled using data from Kalorama Information's previous medical device reports. Primary and secondary research was
used. Research into company annual reports, trade publications, government and medical literature was used as a foundation. Interviews with
executives at medical device companies were conducted and are a key source of estimates.
http://www.kaloramainformation.com/Global‐Medical‐Devices‐8983360/