A Strategic Buyer’s Perspective: Quick Hits
Tactics, processes, relationships, timing – the panelists at our first MedTech M&A Series event in partnership with MassMEDIC spoke about these and more from a strategic buyer’s perspective. Charlie Attlan, SVP of Corporate Strategy & Business Development at Boston Scientific, Eric Knudsen, VP of Corporate Development at ZOLL Medical and Tom Gales, Head of Mergers & Acquisitions at Dräger sat down (virtually) with MedWorld Advisors’ own Dave Sheppard to share their experiences being at the helm of acquisition activity for their respective companies. Here’s a quick look at some of the main discussion points.
M&A Strategy
Mergers and acquisitions are at the heart of corporate medtech strategy. It’s an ever-changing market, and industry players large and small alike have to be nimble to stay on top of things. In terms of how M&A activity fits into company goals, the panelists agreed it’s a combination of planned strategy, tactics and flexible opportunism.
“Our goal is to be strategic and to be proactive, not reactive,” Knudsen said of ZOLL Medical. “You’re always being pitched new strategies and you have to have an open mind to that.”
It’s also a process that’s almost more about saying no than it is saying yes. Referencing two large acquisitions Boston Scientific made recently, Attlan said that “a lot of the debate was not whether those two deals were good – we know they’re good. It’s whether the other 20 that are also good are okay to pass up.” Capital structure and other limitations often mean there’s only space for the best-fitting acquisitions.
With how quickly the world of medtech moves and how many opportunities are on these executives’ plates every day, no two days are alike. Strategy must be malleable and those driving it must be able to adapt quickly.
“It is definitely exciting when smaller, newer companies come – you get opportunities you might not even have thought of before,” Gales said. “Being willing to look at and consider new things is important.”
Idea Process
A large part of the role of those leading corporate development/M&A is efficient coordination. Generally speaking, the panelists gather ideas and propositions from a number of sources, ensure they pass an initial sanity check and make sense for the company, then find the right people to push the deal forward.
“I see myself as a bit of a spider in the web,” Gales said. “We’re catching and funneling all of the opportunities to us, and then we know who the right people are in the organization that can quickly give feedback and evaluate, and say: ‘Does this actually make sense to consider in more detail or not?’”
It’s all about bringing the right people to the table at ZOLL, as well. Deals are multi-step endeavors, and it begins with having everybody aboard the same boat.
“I view my job as a coordinator and consensus builder,” Knudsen said. “There are a number of stakeholders that feed into decision-making and whether or not we pursue a particular opportunity.”
Companies organized into business units often have clearly outlined procedures for M&A ideation. Having dedicated procedures for the planning process paves the way for smooth acquisitions.
“When an opportunity comes in there’s a division president involved, a division business development leader, there’s myself and in the later stages the CFO and CEO of the company,” Attlan said. “What I think we do well at Boston Scientific, particularly as a large company, is we can respond very quickly.”
Agility and clear responsibility are key to being able to make the right moves at the right time.
Deal Origination
With the process outlined, let’s take a step back. Where do these deals actually come from? The answer is pretty much anywhere – investment bankers, professional societies, industry news, cold calling and emailing, you name it. Deals are rarely served up on a platter, however, and it’s often a matter of seeing a window of opportunity and figuring out how to drive it open.
“My job is to connect the dots, read the tea leaves and figure out where there’s an opportunity,” Attlan said. “Sometimes it is obvious, it’s ‘Hey Charlie, this is investment banker ABC and we’re selling this target’ but most of the time it’s not that simple.”
Deals often stem from the areas strategics are already invested in. Knudsen talked about how ZOLL has worked hard to define the disease states they’re interested in, and to be disciplined in pursuing solutions around those disease states. Expansion is key regardless of whether an acquisition grows an existing unit or moves a company into a new sector.
“Some things we look for? Portfolio expansion, so products that might fit a gap in our portfolio or are adjacent are interesting, and market access,” Gales said. “We’re always interested in trying to get access to the right places.”
Some parting wisdom from Charlie Attlan: “Whether you’re a seller or a buyer, what’s really tough with M&A is that timing is super important, and seizing the day is important,” the Boston Scientific executive said. “There’s real value in knowing what you want and being able to act quickly.”
When strategic fit and timing align, value is at its highest. If you missed out on the event, here’s a link to the recording. This was by no means an exhaustive summary – there were gems of knowledge to be found throughout the whole hour. We’ll be diving further into some of the discussion points in the weeks to come. Stay tuned!
Contributing Advisors
