Since 2008, medical device manufacturers Boston Scientific and Medtronic have acquired several private companies that they first invested in. Analyzing the Business Social Graph provides predictive intelligence on who might be next.
Boston Scientific Corp. and Medtronic Inc. are two of the largest medical device firms in the world. And they’re also among the most acquisitive in a medical device M&A market that is quickly heating up. Since 2008, the two medical device manufacturers have acquired more than 15 companies in total, and don’t appear to be slowing down. Just this month, Medtronic (NYSE: MDT, Mkt Cap: $54.38B) announced the acquisition of Cardiocom LLC for $200M while Boston Scientific (NYSE: BSX, Mkt Cap: 14.88B) last acquired C.R. Bard’s electrophysiology unit in June.
But a closer look at the two firms’ respective investment and acquisition history offers predictive clues into their next M&A moves. The Business Social Graph reveals that both have invested in or taken stakes in a number of private companies prior to acquiring them. So based on recent investments and corporate strategy initiatives, we can infer which of the two firms’ portfolio companies are most likely to become future acquisition targets.
Below is a visualization of Medtronic’s Business Social Graph since 2008. The company has made a number of investments over the past five years spanning a number of different applications. Investments in 2013 already include North Bridge Venture Partners and Braemar Energy Ventures-backed MC10, which provides biometric health sensors, and Intersect ENT, which offers medical devices for ear, nose and throat therapies. (Click the graphic to expand).
But three of those investments have since turned into acquisitions. As shown in the chart below, Medtronic invested and then acquired Ardian, Salient Surgical Technologies, and Ventor Technologies. The average price paid for the three companies was $550M. All three of the acquisitions came within two years of Medtronic’s last investment into the respective companies.
Unlike Medtronic, Boston Scientific’s Business Social Graph reveals a preference for acquisitions rather investments. But that may be changing as Boston Scientific has invested in several private companies in 2013 including BAROnova and Setpoint Medical. The visualization below shows Boston Scientific’s investment and acquisition history since 2008.
And like Medtronic, Boston Scientific has also invested in three companies prior to acquiring them as shown below. The average price paid was just over $130M for the three firms (though full payout for Cameron Health may reach as high as $1.35B) and the average amount of time between Boston Scientific’s final investment and acquisition was just over 16 months.
Given both Boston Scientific and Medtronic’s history of investing in early- to mid-stage companies prior to acquisition and some of each organization’s strategic priorities, we identified 10 different portfolio companies that are likely to become future acquisition targets for either Boston Scientific or Medtronic.