Skip to main content
  • login
  • contact
  • language
    • English
    • Français
    • Español
    • Português
    • Deutsch
    • 简体中文
    • 日本語
  • search
X
GEP Logo GEP Logo
  • Company
    • Leadership
    • Customers
    • Partners
    • Sustainability at GEP
    • News
    • Events
    • Culture
    • Mission & Vision
    • Awards & Recognition
  • Solutions
    • Strategy
      • Procurement Consulting  
        • Procurement Transformation
        • Digital Procurement Transformation
        • Opportunity Assessment
        • M & A Services
        • Strategic Cost Management
        • Supply Risk Management
      • Supply Chain Consulting  
        • Environmental, Social and Governance
        • Socially Responsible Sourcing
        • Supply Chain Strategy
        • Supply Chain Diagnostics
        • Inventory Optimization
        • Network Optimization
      Software
      • GEP SMART  
        • Procurement Software
        • Direct Procurement Software
        • Indirect Procurement Software
        • Digital Procurement Transformation
        • Master Data Management
        • AP Automation
        • Spend Management
        • SMART S2P Technology
      • GEP NEXXE  
        • Supply Chain Visibility and Execution
        • Supply Chain Planning
        • Supply Chain Collaboration
        • Supply Chain Control Tower
        • Should-Cost Modeling
        • Inventory and Warehouse Management
      • GEP CLICK  
      • GEP MINERVA  
      Managed Services
      • Procurement Outsourcing  
        • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing
          • Category Management
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services
        • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing  
        • Planning & Forecasting
        • Inventory Management
        • Logistics Management
        • Supply Chain Data Management
        • Supply Chain Risk Management
  • Industries
    • Automotive
    • Chemicals
    • Consumer Packaged Goods
    • Energy & Utilities
    • Financial Services
    • Government & Nonprofit
    • Industrial Manufacturing
    • Life Sciences
    • Oil & Gas
    • Retail
    • Telecommunications, Media & Technology
    • High-Tech
    • Media & Entertainment
    • Software, Social & Platforms
    • Telecom
    • Travel & Hospitality
  • Knowledge Bank
    • Digital Transformation
    • Software & Technology
    • Strategy & Planning
    • Operations
    • Procurement
    • Sustainability
    • Insights From the Top
    • COVID-19 Resource Center
    • Inflation Strategies
  • Careers
    • Join Us
    • GEP Per Se
    • Campus Connect
  • Partners
   
  • GEP Strategy ›
    • GEP Strategy
    • ‹ Back
      • Procurement Consulting ›
        • Procurement Consulting
        • ‹ Back
          • Procurement Transformation ›
            • Procurement Transformation
            • ‹ Back
              • Procurement Strategy
              • Org. Design & Implementation
              • Capability Building
              • Change Management
              • Governance & Performance
              • Processes & Policies
              • S2P Operations
              • Sourcing & Category Management
              • Technology
          • Digital Procurement Transformation
          • Opportunity Assessment
          • M&A Services ›
            • M&A Services
            • ‹ Back
              • M&A Clean Room
          • Strategic Cost Management ›
            • Strategic Cost Management
            • ‹ Back
              • Zero-Based Budgeting
          • Supply Chain Risk Management
      • Supply Chain Consulting ›
        • Supply Chain Consulting
        • ‹ Back
          • SUSTAINABILITY AND RESILIENCE
          • Environmental, Social and Governance
          • Socially Responsible Sourcing
          • Scope 3
          • PLAN
          • Digital Planning, S&OP, S&OE
          • Collaborative Planning
          • PROCURE
          • Source To Contract
          • Procure To Pay
          • MAKE
          • Inventory Strategy & Management
          • Operations & Manufacturing Excellence
          • DELIVER
          • Network Strategy & Optimization
          • Warehousing & Transportation Management
  • GEP Software ›
    • GEP Software
    • ‹ Back
      • GEP SMART ›
        • GEP SMART
        • ‹ Back
          • Procurement Software
          • Direct Procurement Software ›
            • Direct Procurement Software
            • ‹ Back
              • Bill of Materials Management
              • Data Analytics & Reporting
              • Inventory Management
              • Master Data Management
              • Quality Management
              • Supplier Collaboration Portal
              • Supply Chain Operations
          • Indirect Procurement Software ›
            • Indirect Procurement Software
            • ‹ Back
              • Source-to-Contract
              • Spend Analysis
              • Savings Project Management
              • Category Management
              • Contract Management
              • Savings Tracking
              • Sourcing
              • Supplier Management
              • Procure-to-Pay
              • Guided Buying
              • Procurement Portal
              • Catalog Management
              • Order Processing
              • Invoice Management
          • Digital Procurement Transformation
          • Master Data Management
          • Product Accessibility
          • AP Automation
          • Spend Management
          • SMART S2P Technology
      • GEP NEXXE ›
        • GEP NEXXE
        • ‹ Back
          • Supply Chain Visibility and Execution ›
            • Supply Chain Visibility and Execution
            • ‹ Back
              • Inventory and Warehouse Management
              • Logistics Visibility
              • Control Tower
          • Supply Chain Planning ›
            • Supply Chain Planning
            • ‹ Back
              • Supply Chain Control Tower
              • Should-Cost Modeling
              • Demand Planning
              • Supply Chain Bill of Materials
              • Supply Chain Direct Sourcing
              • Supply Planning
          • Supply Chain Collaboration ›
            • Supply Chain Collaboration
            • ‹ Back
              • Forecast Collaboration
              • Purchase Order Collaboration
              • Quality Collaboration
              • Capacity Collaboration
              • Quality Management Software
          • Supply Chain Control Tower
          • Should-Cost Modeling
          • Inventory and Warehouse Management
      • GEP CLICK
      • GEP MINERVA
      • Innovation ›
        • Innovation
        • ‹ Back
          • Emerging Technologies
          • Native to Cloud
          • Native to Mobile
          • One Unified Platform
          • Security
          • User-Centric Design
  • GEP Managed Services ›
    • GEP Managed Services
    • ‹ Back
      • Procurement Outsourcing ›
        • Procurement Outsourcing
        • ‹ Back
          • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing ›
            • Strategic Sourcing
            • ‹ Back
              • MRO
              • CAPEX
              • Logistics
              • Packaging
              • IT & Telecom
              • Energy
              • Direct Materials
          • Category Management ›
            • Category Management
            • ‹ Back
              • Contract Management
              • Supplier Performance Management
              • Savings & Compliance Tracking
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services ›
            • Procurement Support Services
            • ‹ Back
              • eSourcing
              • Supplier Performance Management
              • Savings & Compliance Tracking
              • Sourcing Support
          • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing ›
        • Supply Chain Outsourcing
        • ‹ Back
          • Planning & Forecasting
          • Inventory Management
          • Logistics Management
          • Supply Chain Data Management
          • Supply Risk Management
  • Industries ›
    • Industries
    • ‹ Back
      • Automotive
      • Chemicals
      • Consumer Packaged Goods
      • Energy & Utilities
      • Financial Services
      • Government & Nonprofit
      • Industrial Manufacturing
      • Life Sciences
      • Oil & Gas
      • Retail
      • Telecommunications, Media & Technology
      • High-Tech
      • Media & Entertainment
      • Software, Social & Platforms
      • Telecom
      • Travel & Hospitality
  • Knowledge Bank ›
    • Knowledge Bank
    • ‹ Back
      • Digital Transformation
      • Operations
      • Procurement
      • Software & Technology
      • Strategy & Planning
      • Sustainability
      • Podcasts
      • Insights from the Top
      • COVID-19 Resource Center
      • Inflation Strategies
  • Company ›
    • Company
    • ‹ Back
      • Leadership
      • Customers
      • Partners
      • Sustainability at GEP
      • News
      • Events
      • Culture ›
        • Culture
        • ‹ Back
          • GEP Core Values
          • Women@GEP
          • Diversity
          • GEP Cares
      • Mission & Vision
      • Awards & Recognition
      • Contact Us
  • Global Presence ›
    • Global Presence
    • ‹ Back
      • Americas ›
        • Americas
        • ‹ Back
          • English
          • Español
          • Portugués
      • Europe ›
        • Europe
        • ‹ Back
          • English
          • Deutsch
      • Asia-Pacific ›
        • Asia-Pacific
        • ‹ Back
          • English
          • 中文
      • Middle East ›
        • Middle East
        • ‹ Back
          • English
          • العربية
  • Contact Us
  • Careers ›
    • Careers
    • ‹ Back
      • Join Us
      • GEP Per Se
      • Campus Connect
  • Language ›
    • Language
    • ‹ Back
      • English
      • Français
      • Español
      • Deutsch
      • Português
      • 简体中文
      • 日本語
  • Rapid Response from GEP
  • BLOGS
  • Strategy
  • Technology
  • MIND
Contact Us
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Breadcrumb

  1. HOME
  2. BLOG
  3. STRATEGY
  4. MERGER ACQUISITIONS IN MEDICAL DEVICE CONTRACT MANUFACTURING MARKET
Blog Image

M&A on the Rise in the Medical Device Contract Manufacturing Market

November 22, 2017 | M&A Blogs

The contract manufacturing space in the medical device market has witnessed numerous mergers and acquisitions. Manufacturers are trying to strengthen and expand their capabilities to meet increasingly challenging demands and provide end-to-end services to their medical technology clients who themselves have consolidated rapidly in the past few years.

Factors Leading to Rapid Consolidation

Medical device OEMs have rapidly consolidated in the past few years. The major factors leading to such developments are expansion in new geographies/markets, portfolio expansion, demands to improve time to market, shorter life cycle of products, mature categories and products, pricing pressures and in turn pressure to reduce costs, and healthcare reforms such as Affordable Care Act in USA. Since 2013, five out of the top 30 companies have been acquired and as a result, the top 10 players now capture around 40 percent of the global medical device market. Some notable transactions in this space are Becton Dickinson (2017), Abbott Laboratories/St. Jude Medical (2017), Abbott/Alere (2017), Stryker/Novadaq (2017), Becton Dickinson/CareFusion (2015), Zimmer/Biomet (2015), Cardinal Health/Cordis Corporation (2015), Medtronic/Covidien (2014), Smith & Nephew/ArthroCare (2014), Thermo Fisher/Life Technologies (2013).

What’s Happening in the Contract Manufacturing Space?

To keep up with the developments in the OEM space, the contract manufacturing market for medical devices has also witnessed a flurry of deals. Contract manufacturers are expected to provide more than just standard services as the OEMs are increasingly opening up to involve CMOs in the design and development phase to reduce time to market. Moreover, OEMs are focusing on streamlining their supply chains by teaming up with a limited number of contract manufacturers. Such developments coupled with demand for expanding geographical presence have resulted in contract manufacturers consolidating to mirror the OEM market requirements. Major deals in this space are Kohlberg & Company’s acquisition of Pexco (2017), Nordson’s acquisition of Advanced Technology Business of Vention Medical and MedPlast’s acquisition of Vention Medical’s Medical Devices Manufacturing Services (2017), Molex/Phillips-Medisize (2016), TE Connectivity/Creganna-Tactx (2016), Greatbatch/Lake Region Medical (2015).

Let’s discuss some cases to understand the underlying factors and aim behind M&As in the CMO space:

1. Enhancing Core Capabilities: Kohlberg & Company/Pexco (2017)

  • Kohlberg & Company, a private equity firm acquired Pexco LLC from Odyssey Investment Partners, LLC, a private equity firm
  • Pexco merged with Kelpac Medical — a medical device tubing and packaging solutions company — to form Spectrum Plastics which has a presence across three continents, five countries and 20 plants
  • Kelpac Medical was formed by the acquisition of Kelcourt Plastics — a medical tubing extruder — by PPC Industries which is a specialty films manufacturer for food and industrial applications. Post this acquisition, the addition of Apollo Medical Extrusion, VitalMed, Inc. and Xeridiem Medical Devices expanded Kelpac’s capabilities in medical packaging and assembly, microbore tubing, injection molding, and medical silicone manufacturing
  • Pexco similarly acquired companies such as Scandia Plastics, Spectrum Plastics and Precision Extrusion, Inc. to strengthen its offerings in the medical devices space where it provides services such as extrusion of catheters, medical injection molding, micro molding, value-add machining
  • The combined entity will possess capabilities to extrude thermoplastics and silicone, and provide injection molding, micro molding, film, packaging, and value-add manufacturing technologies

We can clearly observe that this acquisition creates an entity which has deep expertise in the medical device tubing space. Such business proposition makes sense when we observe that competition in the tubing space has intensified with acquisitions such as Nordson’s takeover of Vention Medical’s Advanced Technologies Business.

2. Acquisition of Vention Medical’s Businesses by Nordson and MedPlast

Expanding Capabilities: Nordson’s Acquisition of Vention’s Advanced Technologies Business

  • Vention Medical split into two with Nordson acquiring its Advanced Technologies Business and MedPlast acquiring Medical Device Manufacturing Services
  • Nordson acquired Advanced Technologies segment for $705 million. This segment has expertise in design, development, and manufacture of minimally invasive interventional delivery devices, catheters and advanced components for the global medical technology market
  • This acquisition expands Nordson’s offerings in the medical devices space which currently offers products such as single-use fluid management components, biomaterial delivery devices, and high-end cannula and tubing

Enhancing Core Capabilities: MedPlast’s Acquisition of Medical Device Manufacturing Services

  • MedPlast’s acquisition of Medical Device Manufacturing Services complements its expertise in assembling and packaging surgical, orthopedic, diagnostic and other medical devices
  • This acquisition doubles MedPlast’s size and expands its global footprint to 22 manufacturing facilities across North and Central America, Asia and Europe

3. Diversifying Business: Molex/Phillips-Medisize Corporation (2016)

  • Molex, a leading supplier of connectors and interconnect components, acquired Phillips-Medisize, a leading global outsourcing provider of design development and manufacturing services to the medical sector
  • Molex is a leading electronics components supplier and acquisition of Phillips-Medisize diversifies its offerings and provides it an entry into the lucrative medical devices sector

Conclusion

The medical technology space has witnessed rapid consolidation which has resulted in top 10 companies capturing 40 percent market share. They have consolidated to navigate challenging business requirements, accelerate innovation, reduce time to market and reduce spend. The contract manufacturing market has responded to such market forces through acquisitions which enhance their core capabilities and expand their service offerings to the medical device clients. The medical device contract manufacturing market is expected to consolidate even further and it is expected that in the next three to five years, this market will witness many such deals.

Sources:

  • http://www.businesswire.com/news/home/20170227006055/en/Pexco-PPC-Industries-Merge-Creating-Benchmark-Medical
  • http://www.businesswire.com/news/home/20160817005638/en/Molex-Acquire-Phillips-Medisize-Corporation
  • http://www.nordson.com/en/our-company/news-room/news-releases/nordson-corporation-announces-agreement-to-acquire-advanced-technologies-business-of-vention-medical
  • https://www.prnewswire.com/news-releases/medplast-announces-agreement-to-acquire-vention-medical-device-manufacturing-business-300410203.html
  • https://www.mpo-mag.com/contents/view_breaking-news/2017-02-21/vention-medical-split-and-sold-to-nordon-medplast
 

Tags: mergers

Add Comment +

FEATURED POST

...
Supply Chain Strategy Blogs

How to Effectively Monitor Scope 3 Emissions From Your Supply Chain

...
Supply Chain Software Blogs

From Cost to Resiliency: How Supply Chain Priorities Have Changed

    BLOG CATEGORIES

  • Supply Chain Strategy Blogs
  • Procurement Strategy Blogs
  • Sourcing Strategy Blogs
  • Miscellaneous Blogs
  • Risk Management Blogs
  • Supplier Management Strategy Blogs
  • M&A Blogs
  • Supply Chain Risk Management Blogs
  • Cost Management Blogs
  • Digital Supply Chain Transformation Blogs
  • Inventory Management Blogs
  • Inventory Management

TAGS

sustainability
Procurement Software
supply chain strategy
Inflation
Russia-Ukraine War

By checking the box below, you consent to GEP using your personal information to send you thought leadership content – such as white papers, research reports, case studies – and other communications. GEP representatives may contact you to provide additional information or answer questions.

If at any point in time you decide to withdraw your consent, you may unsubscribe by emailing your request to us at privacy@gep.com.

Please refer to the GEP Privacy Statement to understand how we manage and protect your personal information.

Terms of Use | Privacy Statement

Contact Us

Ask Us

Send us your question(s)

RFP

Request for a business proposal

Feedback

Share your thoughts, comments and suggestions

Demo

Schedule a live demo of our software

Discover
STRATEGY
Strategy
  •   Procurement Consulting
  •   Digital Procurement Transformation
  •   Strategic Cost Management
  •   Opportunity Assessment
  •   Supply Chain Risk Management
  •   Supply Chain Consulting
  •   Supply Chain Strategy
  •   Supply Chain Diagnostics
  •   Inventory Optimization
  •   Procurement Transformation
  •   Sustainability and ESG Consulting
SOFTWARE
Software
  •   Procurement Software
  •   Supply Chain Software
  •   Source-to-Contract
  •   Procure-to-Pay
  •   Supply Chain Planning
  •   Supply Chain Collaboration
  •   Supply Chain Visibility & Execution
  •   Supply Chain Control Tower
  •   Should-Cost Modeling
  •   Inventory & Warehouse Management Software
  •   Source-To-Pay Software
MANAGED SERVICES
Managed Services
  •   Procurement Outsourcing
  •   Strategic Sourcing
  •   Tail-Spend Management
  •   Category Management
  •   Procurement Support Services
  •   Supply Chain Outsourcing
  •   Supply Chain Planning & Forecasting
  •   Inventory Management
  •   Logistics Management
COMPANY
Company
  •   About Us
  •   Leadership
  •   Customers
  •   Sustainability at GEP
  •   Careers
  •   News
  •   Awards
  •   Partners
  •   Contact Us

Fresh Insights, Now on Your Phone

  • Dowmload On The App Store Button
Stay Connected
  •  
  •  
  •  
  •  

Latest Tweets

  • What steps can companies take to achieve #ESG goals effectively? Well, they can start with #procurement. Learn how… https://t.co/HGEfNyGdeD

  • #ElectricVehicles are a key part of the auto industry's plan to become #NetZero by 2050. But EVs aren't enough on t… https://t.co/YlEoys6vTA

  • Why did Asahi choose #GEP as their #procurement and #SupplyChain partner? Check out this video featuring Carmen Rad… https://t.co/RmstcfJXtm

  • GEPpers know how to have a good time! Check out a glimpse of our Winter Party at the GEP Prague office. We are hir… https://t.co/BqVK6XkpHv

  • #Inflation has dampened expectations for GDP growth and raised the risks of a #recession. What can #procurement lea… https://t.co/Hn1R5bxZXn

  • 4D seismic #technology is opening deep-sea #OilAndGas reserves for exploration, lowering costs and optimizing reser… https://t.co/Omq51vlEq7

  • The #GEP Europe Outlook 2023 Roadshow is coming to a city near you! Join us to learn the seven critical priorities… https://t.co/Hzv68et4Rr

  • GEP wishes a Happy Republic Day to all the Indians around the world.  We are #hiring. Explore our careers section:… https://t.co/RKTsyBfQFc

  • Sustainability Outlook for 2023: Trends, Insights and Actions 25 Jan 2023 https://t.co/58KIepy577

  • #Pharma companies are reshoring production, but shortages of active pharmaceutical ingredients make it a challenge.… https://t.co/a3uQJhn7tx

  • With uncertainty looming over 2023, there’s no end in sight to the challenges for #SupplyChain and #Procurement lea… https://t.co/O9tWELnt2i

  • Tight timelines and #COVID-related uncertainties made post-merger data ecosystem #convergence a tricky task for thi… https://t.co/RY6du0AP1D

  • Discover the keys to operating a strategic #procurement and supply function at an essential #PetroChemicals company… https://t.co/sJZmqhnWvS

  • What action should business leaders be taking on #sustainability in 2023? Join #GEP Founder and COO @JT_Turimella a… https://t.co/aerbJSp3GU

  • The pandemic and a labor shortage have exposed gaps in #pharma supply chains. Digital #SupplyChain transformation c… https://t.co/Bwvey5ObWn

  • GEP wishes everyone a very Happy Lunar New Year. May this Year of the Rabbit herald fresh starts and renewal of pro… https://t.co/Lnf3ZkO2zJ

  • Facing uncertainty and #disruption, #procurement needs agility — something #ERPs can’t provide. Here are 5 things t… https://t.co/ouGnhfW6wM

  • #GEP's Global Supply Chain Volatility Index reports 'Demand For Raw Materials Goes Down Reflecting Recession Risks'… https://t.co/dvIRfr8eyd

  • 2023 looks like another challenging year for #LifeSciences companies. This definitive #GEP outlook looks at the mac… https://t.co/ITzThy1PuC

© Copyright GEP 2022. All rights reserved. Terms of Use | Privacy Statement | Cookie Policy |   | Quality Policy | GEP Logo