Medtronic acquired Sapiens Steering Brain Stimulation for around $200 million in an all-cash transaction.
The medtech giant has been on the forefront of the consolidation boom since the beginning of 2014, and only continues to grow. The company is at the center of one of the largest device company acquisitions in history — a $42.9 billion acquisition of Covidien expected to become final by the end of this year or beginning of next year.
As for their most recent transaction, here are five key concepts:
1. Sapiens SBS will strengthen Medtronic's capabilities in brain function modulation, which is an emerging frontier in medicine. In its most recent financial report, Medtronic restated a commitment to invest in innovation, and the company feels this acquisition is part of their strategic goals going forward.
2. The Eindhoven, The Netherlands-based Sapiens SBS develops a deep brain stimulation system with 40 individual stimulation points. The technology is designed for more precise stimulation of the intended target in the brain and could reduce procedure time. The technology may also reduce side effects from stimulation.
3. After the acquisition, employees at the Eindhoven facility will continue to work toward bringing this technology to the market. Further in the future, the site will become a global research and development center for Medtronic's neuromodulation business. The new site is in addition to the company's current research and development locations.
4. Medtronic currently leads the field in neuromodulation, with the company's business including implantable neurostimulation and targeted drug delivery systems for managing chronic pain, movement disorders, spasticity, urologic disorders and gastrointestinal disorders. The company's technology has reached more than 115,000 patients worldwide and the company will work with Sapiens to finalize product development and begin clinical research on their technologies.
5. The transaction is expected to meet Medtronic's long-term financial metrics and does not impact their fiscal year 2015 earnings guidance. The company is expecting full-year revenue to grow 3 percent to 5 percent on a constant currency basis. In the first quarter, the company reported $4.2 billion in revenue.
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