Medtronic ($MDT) is looking to bypass some middlemen in its Turkish operation, buying a controlling stake in one of its distributors and launching a joint venture as it works to expand its share of the growing medical device market.
In a fairly byzantine deal, Medtronic has acquired a majority of shares of distributor Biostar and teaming up with local outfit Medicall Biomedikal to streamline its presence in the country. Medtronic and Medicall will co-own and operate Biostar, and, under the deal, the Turkish company will transfer 85 of its 130 employees to the distributor. Medicall's CEO and marketing chief will jump over to Medtronic to head its Turkish operation under the new arrangement, overseeing Biostar and the rest of the company's efforts in the country.
But behind the nuance of the agreement is an effort to break down barriers between Medtronic and its Turkish customers, Middle East Vice President Majid Kaddoumi said, and the Biostar deal is part of the company's goal to better meet the needs of physicians and patients in the region.
"In key emerging markets like Turkey, creative collaborative ventures like these can help us address the barriers to treatment that patients face today," Kaddoumi said in a statement. "We believe this new relationship will bring us closer to the healthcare system in Turkey and will help increase access to available therapies, improve outcomes through our Academia programs, and optimize cost and efficiency for hospitals, physicians, patients and payers."
And the effort dovetails with Medtronic CEO Omar Ishrak's long-stated goal of deriving 20% of its revenue from emerging markets by 2016. Under Ishrak's tenure, the world's largest devicemaker has spent billions to build its in Asia, buying Chinese orthopedics outfit Kanghui Holdings for $816 million and investing in India to expand the use of its stents.
- read the announcement