Mercer Capital's Value Focus: Medtech & Device Industry | Q4 2018
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The document provides an overview and introduction to Mercer Capital's new quarterly newsletter on the medtech and device industry. The newsletter will include analysis of market performance, valuation multiples, operating metrics, and M&A activity across four sectors: biotechnology & life sciences, medical devices, healthcare technology, and large diversified healthcare companies. Mercer Capital has experience providing valuation services to companies and investors in the medtech sector.
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Mercer Capital's Value Focus: Medtech & Device Industry | Q4 2018
- 1. VALUE FOCUS Medtech & Device Industry Fourth Quarter 2018 We are excited to introduce the first edition of Mercer Capital’s Medtech & Device Industry newsletter. This quarterly update includes a broad outlook that divides the industry into four sectors: (1) Biotechnology & Life Sciences (2) Medical Devices (3) Healthcare Technology and (4) Large, Diversified Healthcare Companies. The update also includes a review of market performance, valuation multiple trends, operating metrics, and other market data as well as an overview of recent mergers and acquisitions information for the industry. Mercer Capital has broad experience in providing valuation services to medtech and device start-ups, larger public and private companies, and private equity and venture capital funds involved in the sector. Please contact us to discuss how we may be of help. BUSINESS VALUATION & FINANCIAL ADVISORY SERVICES
- 2. Copyright © 2018 Mercer Capital Management, Inc. All rights reserved. It is illegal under Federal law to reproduce this publication or any portion of its contents without the publisher’s permission. Media quotations with source attribution are encouraged. Reporters requesting additional information or editorial comment should contact Barbara Walters Price at 901.685.2120. Mercer Capital’s Industry Focus is published quarterly and does not constitute legal or financial consulting advice. It is offered as an informa- tion service to our clients and friends. Those interested in specific guidance for legal or accounting matters should seek competent professional advice. Inquiries to discuss specific valuation matters are welcomed. To add your name to our mailing list to receive this complimentary publication, visit our web site at www.mercercapital.com. Contact Us BUSINESS VALUATION & FINANCIAL ADVISORY SERVICES Medtech & Device Industry Services Mercer Capital provides valuation services to start ups, larger public and private companies, and private equity and venture capital funds. Contact a Mercer Capital professional to discuss your needs in confidence. Sujan Rajbhandary, CFA 901.322.9749 sujanr@mercercapital.com Travis W. Harms, CFA, CPA/ABV 901.322.9760 harmst@mercercapital.com Daniel P. McLeod 901.322.9716 mcleodd@mercercapital.com Monty C. Hsu, CFA, CPA/ABV 214.468.8400 hsum@mercercapital.com Follow Mercer Capital Mercer Capital @MercerCapital In This Issue Mercer Capital’s expertise in the medtech and device industry spans the following segments: • Biotechnology and life sciences • Medical devices • Healthcare technology • Large, diversified Our services include: • Purchase price allocations • Impairment testing • Portfolio valuation for LP reporting • Transaction and valuation advisory • Equity compensation valuation for tax compliance Learn More about Mercer Capital & our Medtech & Device Services at www.mercercapital.com Stock Market Performance 1 Revenue Multiples 2 EBITDA Multiples 3 Select Operating Metrics 4 Mergers Acquisitions 5 Public Medical Device Companies Biotechnology Life Sciences 9 Medical Devices 10 Healthcare Technology 11 Large, Diversified 12
- 3. © 2018 Mercer Capital // www.mercercapital.com 1 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 The industry in aggregate outperformed the market in the twelve months ended September 2018. Each sector equaled or outperformed the SP 500 over the period. »» The biotechnology and life sciences sector started off the period slow but rallied in the second half to return 19.1% over the period. The top performer of the group was Sartorius Stedim Biotech, which posted a 99.4% return. »» The medical device sector posted the second best returns of the group by returning 38.3% for the twelve months ended September 2018. The group’s best performer was ABIOMED which returned 166.8%. »» The healthcare technology sector returned 67.4% over the period, the most of any sector. Tabula Rasa Healthcare increased 203.6% over the period and was responsible for the largest returns of the group. »» The large, diversified sector performed at par with the SP 500 with returns of 15.7% over the year. The top performer within the group was PerkinElmer which increased 41.6% over the period. Stock Market Performance Historical Stock Price Performance -40% -20% 0% 20% 40% 60% 80% Sep 29, 2017 Dec 29, 2017 Mar 30, 2018 Jun 29, 2018 Sep 28, 2018 Biotechnology Life Sciences Medical Devices Healthcare Technology Large, Diversified SP 500 Individual sub-sector performance represented by market capitalization weighted indices for each group. Data Source: Bloomberg LP; Mercer Capital Analysis
- 4. © 2018 Mercer Capital // www.mercercapital.com 2 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 4.85x 3.65x 3.98x 4.48x 4.33x 4.09x 4.43x 4.64x 4.23x 4.21x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x 8.00x 9.00x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 75% Quartile Median 25% Quartile Biotechnology Life Sciences EV / Trailing LTM Revenue Healthcare Technology EV / Trailing LTM Revenue Medical Devices EV / Trailing LTM Revenue Large, Diversified EV / Trailing LTM Revenue 13.43x 6.00x 3.52x 0.00x 2.00x 4.00x 6.00x 8.00x 10.00x 12.00x 14.00x 16.00x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 4.78x 4.59x 4.12x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 5.74x 4.60x 3.36x 0.00x 2.00x 4.00x 6.00x 8.00x 10.00x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 Median Revenue multiples from each MCM group. Data source: Bloomberg Revenue Multiples 8.54x 5.81x 4.20x 0.00x 2.00x 4.00x 6.00x 8.00x 10.00x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016
- 5. © 2018 Mercer Capital // www.mercercapital.com 3 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 4.85x 3.65x 3.98x 4.48x 4.33x 4.09x 4.43x 4.64x 4.23x 4.21x 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x 8.00x 9.00x 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 75% Quartile Median 25% Quartile Biotechnology Life Sciences EV / Trailing LTM EBITDA Healthcare Technology EV / Trailing LTM EBITDA Medical Devices EV / Trailing LTM EBITDA Large, Diversified EV / Trailing LTM EBITDA 51.9x 30.2x 12.5x 0.0x 10.0x 20.0x 30.0x 40.0x 50.0x 60.0x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 27.4x 16.4x 10.3x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 18.2x 16.0x 13.1x 0.0x 5.0x 10.0x 15.0x 20.0x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016 Median EBITDA multiples from each MCM group. Data source: Bloomberg EBITDA Multiples 30.9x 20.8x 15.4x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x 3Q 20182Q 20181Q 20184Q 20173Q 20172Q 20171Q 20174Q 2016
- 6. © 2018 Mercer Capital // www.mercercapital.com 4 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Median measures for each group. | Data Source: Bloomberg TTM Gross Margin TTM Operating Margin TTM RD / Revenue TTM EBITDA Margin Sector 3Q 2018 2Q 2018 3Q 2018 2Q 2018 3Q 2018 2Q 2018 3Q 2018 2Q 2018 Biotechnology Life Sciences 71.6% 69.9% 22.4% 21.8% 18.0% 17.5% 33.9% 33.3% Medical Devices 66.5% 67.5% 21.4% 20.1% 6.6% 6.8% 28.5% 27.5% Healthcare Technology 69.6% 58.4% 9.3% 7.5% 13.9% 13.7% 21.1% 22.3% Large, Diversified 56.0% 56.2% 17.3% 17.2% 7.7% 7.9% 25.0% 25.1% Overall Median 66.8% 65.7% 20.1% 17.2% 9.5% 8.9% 27.7% 27.3% Revenue Growth LT Fwd Op Earn Grwth Debt / EV Debt / EBITDA Sector Q / Q Y / Y 3Q 2018 3Q 2018 2Q 2018 3Q 2018 2Q 2018 Biotechnology Life Sciences 0.0% 2.8% 13.2% 8.4% 9.9% 1.7 1.4 Medical Devices 0.4% 2.5% 10.3% 5.0% 8.7% 1.2 1.7 Healthcare Technology 4.9% 3.9% 15.3% 1.1% 6.7% 0.4 0.8 Large, Diversified -1.4% 1.9% 9.3% 13.1% 16.6% 2.5 2.5 Overall Median -0.1% 2.5% 12.0% 6.4% 10.1% 1.6 1.7 Select Operating Metrics
- 7. © 2018 Mercer Capital // www.mercercapital.com 5 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Implied EV Acquirer Target Announce Date Transaction Value Implied EV Revenue EBIT EBITDA Target Sector Takeda Pharmaceutical Company Limited Shire plc 4/19/18 $81,667 $81,349 5.30x 20.1x 12.6x Biotechnology Sanofi Bioverativ Inc. 1/22/18 $11,474 $11,038 9.45x 23.7x 23.2x Biotechnology Celgene Corporation Juno Therapeutics, Inc. 1/22/18 $9,305 $9,556 85.42x nm nm Biotechnology Novartis AG AveXis, Inc. 4/9/18 $8,696 $8,110 nm nm nm Biotechnology Celgene Corporation Impact Biomedicines, Inc. 1/7/18 $7,000 $7,000 nm nm nm Healthcare Elliott Management Corporation athenahealth, Inc. 5/7/18 $6,880 $6,833 5.40x 50.5x 32.2x Health Care Technology Verscend Technologies, Inc. Cotiviti Holdings, Inc. 6/19/18 $5,119 $4,929 6.68x 23.5x 17.1x Health Care Technology Sanofi Ablynx NV 1/29/18 $4,769 $4,395 64.10x nm nm Biotechnology Fortive Corporation Advanced Sterilization Products Services Inc. 6/6/18 $2,700 $2,700 3.48x nm nm Healthcare Platinum Equity, LLC LifeScan, Inc. 3/16/18 $2,100 $2,100 1.40x nm nm Healthcare Danaher Corporation Integrated DNA Technologies, Inc. 3/9/18 $2,000 na nm nm nm Healthcare Zoetis Inc. Abaxis, Inc. 5/16/18 $1,995 $1,828 7.47x 47.6x 39.4x Health Care Equipment Roche Holding AG Flatiron Health, Inc. 2/15/18 $1,900 $2,174 nm nm nm Healthcare Eli Lilly and Company ARMO BioSciences, Inc. 5/10/18 $1,628 $1,463 nm nm nm Biotechnology Stryker Corporation K2M Group Holdings, Inc. 8/30/18 $1,406 $1,340 4.93x nm nm Health Care Equipment Inovalon Holdings, Inc. ABILITY Network Inc. 3/7/18 $1,200 $1,200 8.57x nm 16.6x Healthcare Alexion Pharmaceuticals, Inc. Syntimmune, Inc. 9/26/18 $1,200 $1,200 nm nm nm Healthcare H. Lundbeck A/S Prexton Therapeutics SA 3/16/18 $1,112 $1,112 nm nm nm Healthcare Altaris Capital Partners, LLC Analogic Corporation 4/10/18 $1,087 $921 1.96x 41.5x 20.4x Health Care Equipment Veritas Capital Fund Management, LLC VVC Holding Corp. 4/2/18 $1,050 $1,050 nm nm nm Healthcare Janssen Biotech, Inc. Benevir Biopharm, Inc. 5/2/18 $1,040 $1,040 nm nm nm Healthcare Transaction values over $50 million Source: Capital IQ Mergers Acquisitions
- 8. © 2018 Mercer Capital // www.mercercapital.com 6 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Implied EV Acquirer Target Announce Date Transaction Value Implied EV Revenue EBIT EBITDA Target Sector PTC Therapeutics, Inc. Agilis Biotherapeutics, LLC 7/19/18 $945 $945 nm nm nm Healthcare Charles River Laboratories International, Inc. MPI Research Inc. 2/13/18 $800 $800 nm nm nm Healthcare Novo Nordisk A/S Ziylo Ltd 8/17/18 $800 $800 nm nm nm Healthcare Alexion Pharmaceuticals, Inc. Wilson Therapeutics AB (publ) 4/11/18 $788 $737 nm nm nm Biotechnology Roche Holding AG Tusk Therapeutics Ltd 9/28/18 $761 $761 nm nm nm Healthcare Global Payments Inc. AdvancedMD, Inc. 8/2/18 $700 $700 nm nm nm Healthcare Takeda Pharmaceutical Company Limited TiGenix NV 1/5/18 $674 $657 602.70x nm nm Biotechnology Akebia Therapeutics, Inc. Keryx Biopharmaceuticals, Inc. 6/28/18 $631 $571 8.09x nm nm Healthcare Seattle Genetics, Inc. Cascadian Therapeutics, Inc. 1/31/18 $623 $530 nm nm nm Biotechnology Boston Scientific Corporation Augmenix, Inc. 9/6/18 $600 $600 nm nm nm Healthcare Bio-Techne Corporation Exosome Diagnostics, Inc. 6/25/18 $575 $575 nm nm nm Healthcare Cognizant Technology Solutions Corporation Bolder Healthcare Solutions LLC 3/12/18 $477 $477 nm nm nm Healthcare Denali Therapeutics Inc. F-star Gamma Ltd 5/30/18 $471 $471 nm nm nm Healthcare R1 RCM Inc. Intermedix Corporation 2/26/18 $460 $460 2.38x nm 9.6x Healthcare Amicus Therapeutics, Inc. Celenex, Inc. 9/20/18 $452 $452 nm nm nm Healthcare Brooks Automation, Inc. GENEWIZ, Inc. 9/26/18 $450 $450 nm nm nm Healthcare Wright Medical Group, Inc. Cartiva, Inc. 8/27/18 $435 $435 nm nm nm Healthcare Otsuka America, Inc. Visterra, Inc. 7/11/18 $430 $430 nm nm nm Pharmaceuticals Gerresheimer AG Sensile Medical AG 7/11/18 $410 $410 nm nm nm Healthcare Precision Engineered Products LLC Paragon Medical, Inc. 4/3/18 $375 $375 2.66x nm nm Healthcare Boston Scientific Corporation nVision Medical Corporation 4/16/18 $275 $275 nm nm nm Healthcare Transaction values over $50 million Source: Capital IQ Mergers Acquisitions (continued)
- 9. © 2018 Mercer Capital // www.mercercapital.com 7 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Implied EV Acquirer Target Announce Date Transaction Value Implied EV Revenue EBIT EBITDA Target Sector Axcel Management A/S Orion Diagnostica Oy 4/21/18 $274 $274 4.13x 25.1x nm Healthcare Boston Scientific Corporation Claret Medical, Inc. 7/20/18 $270 $270 nm nm nm Healthcare LivaNova PLC CardiacAssist, Inc. 2/14/18 $250 $250 11.90x nm nm Healthcare Agilent Technologies, Inc. Advanced Analytical Technologies, Inc. 3/7/18 $250 $250 nm nm nm Healthcare Agilent Technologies, Inc. ACEA Biosciences, Inc 9/25/18 $250 $250 nm nm nm Healthcare LM US Parent, Inc. Cogentix Medical, Inc. 3/12/18 $238 $211 3.75x nm 94.3x Health Care Equipment Exl Service.com, LLC SCIOInspire, Corp. 5/1/18 $237 $237 nm nm nm Healthcare QIAGEN N.V. NeuMoDx Molecular, Inc. 9/17/18 $234 $292 nm nm nm Healthcare Spectris plc Concept Life Sciences Limited 1/26/18 $231 $231 nm nm nm Healthcare Stryker Corporation Invuity, Inc. 9/11/18 $224 $200 4.91x nm nm Health Care Equipment Boston Scientific Corporation Cryterion Medical, Inc. 7/5/18 $202 $311 nm nm nm Healthcare RevSpring, Inc. Apex Revenue Technologies, LLC 9/11/18 $200 $200 nm nm nm Healthcare Allergan plc Bonti, Inc. 9/14/18 $195 $195 nm nm nm Healthcare QIAGEN N.V. STAT-Dx Life S.L. 1/31/18 $191 $191 nm nm nm Healthcare Clearlake Capital Group, L.P. ProVation Medical, Inc. 1/11/18 $180 $180 nm nm nm Healthcare Boston Scientific Corporation VENITI, Inc. 8/8/18 $160 $196 nm nm nm Healthcare AXA SA Maestro Health 1/22/18 $155 $155 nm nm nm Healthcare DENTSPLY SIRONA Inc. OraMetrix, Inc. 3/26/18 $150 $150 7.50x nm nm Healthcare BTG plc Novate Medical Limited 9/7/18 $150 $150 nm nm nm Healthcare Allscripts Healthcare, LLC Practice Fusion, Inc. 1/8/18 $129 $114 nm nm nm Healthcare Hologic, Inc. Focal Therapeutics, Inc. 9/26/18 $125 $125 7.81x nm nm Healthcare Transaction values over $50 million Source: Capital IQ Mergers Acquisitions (continued)
- 10. © 2018 Mercer Capital // www.mercercapital.com 8 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Implied EV Acquirer Target Announce Date Transaction Value Implied EV Revenue EBIT EBITDA Target Sector Francisco Partners Management LLC Connecture, Inc. 1/4/18 $113 $108 1.41x nm nm Health Care Technology Allscripts Healthcare, LLC HealthGrid 5/3/18 $110 $110 nm nm nm Healthcare Astellas Pharma Inc. Quethera Limited 8/10/18 $109 $109 nm nm nm Healthcare Blackstone Medical, Inc. Spinal Kinetics, Inc. 3/15/18 $105 $105 nm nm nm Healthcare Agilent Technologies, Inc. LaserGen, Inc. 3/6/18 $105 $202 nm nm nm Healthcare Astellas Pharma Inc. Universal Cells Inc. 2/14/18 $103 $103 nm nm nm Healthcare bioMérieux S.A. Astute Medical, Inc. 4/4/18 $90 $90 nm nm nm Healthcare AngioDynamics, Inc. RadiaDyne, L.L.C. 9/13/18 $90 $90 15.00x nm nm Healthcare Aurora Cannabis Inc. Anandia Laboratories Inc. 6/12/18 $87 $87 nm nm nm Healthcare Hologic, Inc. Faxitron Bioptics, LLC 7/31/18 $85 $85 3.15x nm nm Healthcare Shanghai Xianfeng Investment Management Co., Ltd elliquence, LLC 6/4/18 $77 $77 4.83x nm nm Healthcare Magnum Capital Industrial Partners INDIBA, S.A. 1/11/18 $72 $72 3.00x nm 8.6x Healthcare Harvard Bioscience, Inc. Data Sciences International, Inc. 1/22/18 $70 $70 1.59x nm nm Healthcare Halyard Health, Inc. (nka:Avanos Medical, Inc.) CoolSystems, Inc. 6/5/18 $65 $65 1.86x nm nm Healthcare UFP Technologies, Inc. Dielectrics, Inc. 2/2/18 $60 $57 1.33x nm nm Healthcare Tecan Group Ltd. NuGEN Technologies, Inc. 8/16/18 $55 $55 3.78x nm nm Healthcare Transaction values over $50 million Source: Capital IQ Mergers Acquisitions (continued)
- 11. © 2018 Mercer Capital // www.mercercapital.com 9 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Price ∆ Stock Price EV TTM Rev TTM EBITDA FWD EBITDA EV / Rev. EV / EBITDA EV / FWD EBITDA 3Q18 2Q18 3Q17 Qtrly Annual 3Q18 3Q18 3Q18 FY 2019 FY 2020 3Q18 3Q18 2019 2020 Biotechnology Life Sciences Alexion Pharmaceuticals Inc ALXN $139 $124 $140 12.0% -0.9% $29,071 $3,912 $1,940 $2,416 $2,737 7.43x 15.0x 12.0x 10.6x Biogen Inc BIIB 353 290 313 21.7% 12.8% 63,255 13,234 7,099 7,274 7,647 4.78x 8.9 8.7 8.3 Bio-Rad Laboratories Inc BIO 313 289 222 8.5% 40.8% 7,612 2,293 353 372 407 3.32x 21.6 20.5 18.7 Celgene Corp CELG 89 79 146 12.7% -38.6% 69,641 14,727 6,779 8,940 9,778 4.73x 10.3 7.8 7.1 Sartorius Stedim Biotech DIM 138 105 69 31.7% 100.2% 11,935 1,393 407 336 388 8.57x 29.4 35.5 30.7 Eurofins Scientific SE ERF 568 556 628 2.1% -9.5% 12,045 7,925 1,297 698 820 1.52x 9.3 17.3 14.7 Gilead Sciences Inc GILD 77 70 79 9.8% -1.8% 87,321 22,281 nm 12,147 11,962 3.92x nm 7.2 7.3 Illumina Inc ILMN 367 279 199 31.4% 84.3% 47,118 3,243 1,099 1,093 1,290 14.53x 42.9 43.1 36.5 IQVIA Holdings Inc IQV 130 100 95 30.0% 36.5% 34,608 10,301 2,097 2,194 2,414 3.36x 16.5 15.8 14.3 Lonza Group AG LONN 343 266 259 29.2% 32.3% 27,783 6,040 nm 1,556 1,734 4.60x nm 17.9 16.0 Mettler-Toledo International Inc MTD 609 579 626 5.2% -2.7% 15,205 nm nm 773 839 nm nm 19.7 18.1 Regeneron Pharmaceuticals Inc REGN 404 345 447 17.1% -9.6% 35,077 nm nm 2,932 3,197 nm nm 12.0 11.0 Shire PLC SHP 60 56 50 7.3% 19.8% 68,998 15,702 6,673 6,587 6,786 4.39x 10.3 10.5 10.2 Vertex Pharmaceuticals Inc VRTX 193 170 152 13.4% 26.8% 41,285 2,829 703 1,185 1,306 14.59x 58.7 34.8 31.6 Waters Corp WAT 195 194 180 0.6% 8.4% 13,732 2,392 842 850 887 5.74x 16.3 16.2 15.5 ($Millions, except per share figures) Data Source: Bloomberg Public Medical Device Companies
- 12. © 2018 Mercer Capital // www.mercercapital.com 10 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Public Medical Device Companies (continued) Price ∆ Stock Price EV TTM Rev TTM EBITDA FWD EBITDA EV / Rev. EV / EBITDA EV / FWD EBITDA 3Q18 2Q18 3Q17 Qtrly Annual 3Q18 3Q18 3Q18 FY 2019 FY 2020 3Q18 3Q18 2019 2020 Medical Devices Terumo Corp 4543 $59 $57 $39 3.9% 52.3% $22,846 $5,144 $1,306 $159,509 $173,994 4.44x 17.5x 0.1x 0.1x Sysmex Corp 6869 86 93 63 -7.4% 36.1% 13,755 2,422 711 80,832 90,308 5.68x 19.3 0.2 0.2 Olympus Corp 7733 39 37 34 4.3% 16.3% 12,333 6,961 1,161 118,727 155,341 1.77x 10.6 0.1 0.1 ABIOMED Inc ABMD 450 409 169 9.9% 166.8% 16,890 544 148 241 330 31.05x 113.8 70.2 51.2 Align Technology Inc ALGN 391 342 186 14.3% 110.0% 17,763 1,854 505 520 667 9.58x 35.2 34.1 26.6 Baxter International Inc BAX 77 74 62 4.7% 24.1% 33,850 11,060 nm 2,627 2,910 3.06x nm 12.9 11.6 Boston Scientific Corp BSX 39 33 29 17.7% 32.0% 57,396 9,670 2,757 2,825 3,154 5.94x 20.8 20.3 18.2 Coloplast A/S COLOB 102 100 79 2.3% 30.1% 20,231 2,597 902 6,255 6,901 7.79x 22.4 3.2 2.9 Edwards Lifesciences Corp EW 174 146 109 19.6% 59.3% 31,538 3,634 1,100 1,245 1,397 8.68x 28.7 25.3 22.6 Hologic Inc HOLX 41 40 37 3.1% 11.7% 13,615 3,207 1,019 1,093 1,138 4.25x 13.4 12.5 12.0 IDEXX Laboratories Inc IDXX 250 218 155 14.6% 60.6% 18,438 2,170 558 581 656 8.50x 33.0 31.7 28.1 Intuitive Surgical Inc ISRG 574 478 349 20.0% 64.6% 55,824 3,570 1,353 1,557 1,761 15.64x 41.3 35.9 31.7 ResMed Inc RMD 115 103 76 11.7% 52.1% 15,363 2,273 650 795 876 6.76x 23.6 19.3 17.5 Smith Nephew PLC SN/ 18 18 18 -1.0% 3.0% 16,821 4,869 1,384 1,393 1,494 3.45x 12.2 12.1 11.3 Stryker Corp SYK 178 168 140 5.5% 26.6% 66,872 13,276 3,704 3,773 4,127 5.04x 18.1 17.7 16.2 Wright Medical Group NV WMGI 29 26 26 11.8% 12.2% 4,256 nm nm 111 155 nm nm 38.2 27.4 Zimmer Biomet Holdings Inc ZBH 131 111 116 18.2% 13.2% 32,165 7,936 2,665 2,708 2,741 4.05x 12.1 11.9 11.7 ($Millions, except per share figures) Data Source: Bloomberg
- 13. © 2018 Mercer Capital // www.mercercapital.com 11 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Price ∆ Stock Price EV TTM Rev TTM EBITDA FWD EBITDA EV / Rev. EV / EBITDA EV / FWD EBITDA 3Q18 2Q18 3Q17 Qtrly Annual 3Q18 3Q18 3Q18 FY 2019 FY 2020 3Q18 3Q18 2019 2020 Healthcare Technology M3 Inc 2413 $23 $20 $14 14.0% 60.0% $10,698 $806 $251 $34,242 $40,020 13.27x 42.7x 0.3x 0.3x athenahealth Inc ATHN 134 159 124 -16.0% 7.4% 5,031 nm nm 369 418 nm nm 13.7 12.0 Cerner Corp CERN 64 60 71 7.7% -9.7% 18,316 5,314 1,463 1,573 1,712 3.45x 12.5 11.6 10.7 Craneware PLC CRW 44 28 18 57.4% 151.3% 1,080 62 19 26 30 17.37x 56.7 42.2 35.7 Evolent Health Inc EVH 28 21 18 34.9% 59.6% 1,742 nm nm 22 57 nm nm 78.2 30.6 HMS Holdings Corp HMSY 33 22 20 51.8% 65.2% 2,961 591 131 150 160 5.01x 22.5 19.8 18.5 Inovalon Holdings Inc INOV 10 10 17 1.3% -41.1% 2,316 nm nm 170 204 nm nm 13.6 11.3 Allscripts Healthcare Solutions Inc MDRX 14 12 14 18.8% 0.1% 3,919 2,079 385 420 458 1.88x 10.2 9.3 8.6 Medidata Solutions Inc MDSO 73 81 78 -9.0% -6.1% 4,260 610 82 151 187 6.99x 51.9 28.2 22.8 NextGen Healthcare Inc NXGN 20 20 16 3.0% 27.7% 985 528 106 82 91 1.87x 9.3 12.0 10.8 Omnicell Inc OMCL 72 52 51 37.1% 40.8% 2,884 774 95 126 157 3.73x 30.2 22.8 18.4 Teladoc Health Inc TDOC 86 58 33 48.8% 160.5% 5,020 372 (25) 13 41 13.48x -197.2 384.4 123.8 Tabula Rasa HealthCare Inc TRHC 81 64 27 27.2% 203.6% 1,578 nm nm 29 42 nm nm 53.9 37.8 Veeva Systems Inc VEEV 109 77 56 41.6% 93.0% 12,318 654 166 288 346 18.84x 74.3 42.8 35.6 ($Millions, except per share figures) Data Source: Bloomberg Public Medical Device Companies (continued)
- 14. © 2018 Mercer Capital // www.mercercapital.com 12 Mercer Capital’s Value Focus: Medtech Device Industry Fourth Quarter 2018 Price ∆ Stock Price EV TTM Rev TTM EBITDA FWD EBITDA EV / Rev. EV / EBITDA EV / FWD EBITDA 3Q18 2Q18 3Q17 Qtrly Annual 3Q18 3Q18 3Q18 FY 2019 FY 2020 3Q18 3Q18 2019 2020 Large, Diversified Agilent Technologies Inc A $70 $62 $63 14.3% 10.9% $20,688 $4,809 $1,141 $1,216 $1,318 4.30x 18.1x 17.0x 15.7x AbbVie Inc ABBV 94 91 85 3.1% 10.2% 153,842 32,187 nm 15,341 16,967 4.78x nm 10.0 9.1 Abbott Laboratories ABT 73 60 52 20.8% 40.1% 139,478 30,402 7,626 7,505 8,395 4.59x 18.3 18.6 16.6 Amgen Inc AMGN 207 183 181 13.1% 14.4% 123,704 23,319 12,452 13,153 12,710 5.30x 9.9 9.4 9.7 Becton Dickinson and Co BDX 261 239 193 9.3% 34.9% 86,234 14,746 4,753 4,908 5,835 5.85x 18.1 17.6 14.8 Danaher Corp DHR 109 99 85 10.3% 27.5% 80,809 19,615 4,695 4,799 5,142 4.12x 17.2 16.8 15.7 Johnson Johnson JNJ 138 121 127 14.6% 9.1% 394,417 81,382 29,124 29,664 30,380 4.85x 13.5 13.3 13.0 Medtronic PLC MDT 98 85 76 16.2% 29.3% 137,788 29,725 9,350 9,904 10,533 4.64x 14.7 13.9 13.1 Koninklijke Philips NV PHIA 46 43 40 7.1% 13.0% 40,368 21,210 3,488 2,954 3,317 1.90x 11.6 13.7 12.2 PerkinElmer Inc PKI 97 73 69 32.9% 41.6% 11,013 2,663 563 598 654 4.13x 19.6 18.4 16.8 Roche Holding AG ROG 244 222 246 9.5% -0.9% 222,864 56,740 23,513 22,352 22,577 3.93x 9.5 10.0 9.9 Siemens Healthineers AG SHL 44 41 0 6.4% nm 46,473 16,090 3,302 2,716 2,969 2.89x 14.1 17.1 15.7 Thermo Fisher Scientific Inc TMO 244 207 189 17.9% 29.4% 111,963 23,898 5,939 6,313 6,831 4.69x 18.9 17.7 16.4 ($Millions, except per share figures) Data Source: Bloomberg Public Medical Device Companies (continued)
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