Smaller devicemakers eye mergers in Q3

Spinal Tech

Large spine and orthopedic mergers have closed this year, and smaller device companies have sought to get their own slice of the pie during the third quarter.

In July, Xtant Medical and Augmedics acquired three of Surgalign's business segments through an auction. Xtant took the hardware and biologics, and Augmedics took the digital health assets after Surgalign filed for Chapter 11 bankruptcy.

This month, Restor3d completed its acquisition of Conformis. The deal values Conformis at $2.27 per share.

In September, two multimillion dollar acquisitions were also announced. Boston Scientific plans to acquire Relievant Medsystems, which is behind the Intracept spine procedure. That deal values Relievant Medsystems at $850 million and is expected to close in 2024. Enovis also shared plans this month to acquire LimaCorporate in a deal worth more than $700 million.

Medtech merger interest is ramping up, and it isn't stopping anytime soon, Frank Phillips, MD, told Becker's.

"I think mergers of medtech companies is a trend that will continue," Dr. Phillips, of Chicago-based Midwest Orthopaedics at Rush, said. "Many small companies that have a suite of 'me-too' products with a cohort of surgeons using their generic devices add little value to spine care or to improving patient outcomes. As capital markets become increasingly challenging, it will become more difficult for these smaller non-differentiated independent companies to thrive. In addition, as expensive enabling technologies with relatively long development times become ubiquitous, mergers centered around access to these technologies will continue. Mergers have been claimed to limit choices and increase pricing; however, in reality with the high number of spinal companies and the pricing pressure hospitals are able to exert on device manufacturers, it is exceedingly unlikely these mergers will result in higher pricing."

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