3 min reading time

As originally asked by Gary Abramov.

Can anyone share recent data on the valuations of acquired medical device makers?
I am interested in revenue multiples, that sort of thing.
For example, Cardinal Health acquired by Boston Scientific.

Thanks in advance.

Gary

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Burrell (Bo) Clawson
I research patents & design products to get a patented competitive position: Over 30 patents.
“Last Twelve Months” earnings

Gary Abramov
General Manager – Product Development Manager at Pacific Blue Innovations, LLC
Thank you all VERY MUCH: this really helps. And yes, it was ‘Cameron’ Health :). They developed a new implantable defibrillator for (eventually) Boston Scientific.

John Hoppe
Owner, VacuMed
What’s “LTM”?

Burrell (Bo) Clawson
I research patents & design products to get a patented competitive position: Over 30 patents.
Generally valuation has fallen into 2 categories from what I’ve seen printed.

1. Multiples of sales (companies who buy customers).
2. Multiples of earnings (companies who are often buying high margin, IP protected companies).

The multiples? It is all how good your customer base is for #1 & how great your product and IP are worth for #2. Your number versus your buyer. Become the best negotiator you can be by loading up with the best data and arguments on your side.

Thomas Ricks
V.P. Finance at Asthmatx
As someone who was acquired (I’m the Finance guy) in the last 3 years —valuation (like beauty) is in the eye of the beholder—Make a five yr. model -based on sales of the acquirer’s ability to sell, the next trick is the discount rate (equate to # of hurdles to get to Market) –and the multiple is how much they REEEEALLY need you—the truth is….it’s a poker game…. and the more players you can get to the table….the better off you are…

Paul Teitelbaum
Experienced Strategic Advisor in Medical Technology
… note – the valuations above are really relevant to an exit (e.g., sale to a strategic buyer) or where a company might trade if public (excluding a few irrational outliers) but not for pre-money valuation you might expect to get from a VC – that’s a different story.

Paul Teitelbaum
Experienced Strategic Advisor in Medical Technology
Depends upon size and stage of the target company, how innovative the products are, their profitability, growth rate, etc.. For high-growth companies with revenues below $100 million and focusing on innovative high-tech, high margin products, one might expect 4x – 6x LTM revenues. For those with slower growth, products that are less cutting edge (might be commodities within the next 5-7 years), medical equipment, or much larger companies, one might expect 1.5x – 3x LTM revenues. Over the past 12 months, we have seen a few companies with relatively high tech, high margin products and relatively rapid growth acquired at around 5x LTM revenues. Of course the devil is in the details – there are alot of factors affecting this. Let me know if someone is looking for a proper valuation.

David C Robinson
Managing Partner at Cognitive, Disruptor, Father and Activist
Look at the nvca.org website. They have some recent valuation guidelines that you might find helpful. Let me know if you have trouble tracking down your answer and I’ll post the link to the latest valuation guidelines.

Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
Pretty sure that’s “Cameron Health” back in 2012. Definitely not “Cardinal Health.”

Don Rosenkoetter
Managing Director at The Co-Investment Partnership, LLC, Partner, Newport Board Group
Levin publishes a pretty good summary of deals and terms. Annual and Quarterly summaries are available as well as monthly subscriptions.

Sarah H. Stec
Senior Counsel, Medical Device Regulatory Law at Johnson & Johnson
I’m not sure if it has the exact information you’re looking for, but the trade publication Clinica usually has a run-down of the major mergers and acquisitions in the industry.