Medtronic Pays $350M For NGC Medical In Second European Acquisition Of The Week
By Jof Enriquez,
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Medtronic recently announced that it is buying the rest of hospital services firm NGC Medical for $350 million, after having held a 30 percent ownership stake in the Italian firm for the past year.
NGC manages operating rooms, intensive care units, and cardiovascular suites at nearly 30 hospitals across Italy, according to a Medtronic press release. The medical device giant said NGC will beef up its “growing portfolio of efficiency solutions for hospitals, and enhances its ability to provide higher levels of economic value to physicians, payers and health systems.”
Medtronic said in the statement that NGC will continue to operate independently and will become the managed services arm for the company’s Hospital Solutions business. It says the deal allows it to “leverage the economic value of its products and services.”
“I am delighted that NGC will join Medtronic and add to our growing offering to hospitals and health systems,” Rob ten Hoedt, executive VP and president of Medtronic's EMEAC (Europe, Middle East, Africa, and Canada) region, said in the statement. “As we are all acutely aware, current models of delivering healthcare are not sustainable, and Medtronic is intent on finding new ways to partner with physicians, hospital systems, patients, payers and governments around the world to meet their cost and access challenges and to deliver high quality healthcare.”
It is the second acquisition this week for Medtronic, who announced earlier that it is acquiring Dutch firm Sapiens Steering Brain Solutions (SBS) for $200 million to strengthen its neuromodulation business. It is also aiming to close its merger agreement with Covidien by the end of the year.
As noted in a Minneapolis/St. Paul Business Journal article, the consecutive Sapiens and NGC transactions are in “greatly different areas” that show how “Medtronic is looking to diversify its business under CEO Omar Ishrak.” The Sapiens acquisition is more in line with Medtronic’s traditional medical device offerings, while the NGC deal is all about services.
The NGC acquisition is “aligned with the Minneapolis-based medical-device manufacturer's strategy of acquiring companies that fit into three clinical categories — cardiovascular, neuro-musculoskeletal and diabetes — or help the company better partner with hospitals,” according to Modern Healthcare.
“Given the market's shift to value-based healthcare, we are expanding our medical-device product offerings to include broader healthcare services and solutions that provide meaningful clinical outcomes and economic value for hospitals, physicians, patients and payers,” Medtronic said in a recent regulatory filing about the services and solutions segment of its Cardiac Rhythm Disease Management (CRDM) business.