Chinese device giant Mindray Medical ($MR) has bought a controlling stake in another local instrument producer, snapping up Wuhan Dragonbio Surgical Implant Co. for $35.5 million.
Dragonbio is a producer of surgical orthopedic tools, specializing in spine, joint and trauma products. And while Dragonbio pulled in just $7.7 million in 2011, Mindray said in a release that acquiring the company will give it a chance to break into the Chinese orthopedics market, which Frost & Sullivan valued at $1.1 billion in 2010 with a projected annual growth rate of 18%. Furthermore, the company has its eye on the world orthopedic device market, which Mindray valued at $30 billion in 2011.
"The orthopedic consumable market has high barriers to entry, but this deal will give us instant access to this promising and sizable market," Chief Strategic Officer Minghe Cheng said in a statement.
The Dragonbio deal is hardly Mindray's first acquisition. Last month, the company bought up a local endoscope producer for undisclosed terms, and, in 2011, Mindray purchased a Chinese maker of microbiological analysis systems. The flurry of deals is all part of Mindray's diversification plan. The company already sells devices for medical imaging, patient monitoring, life support and in vitro diagnostics, and, with its bullish M&A strategy, continues to expand its market share.
While Mindray is among the largest and most visible companies in the Chinese device market, it is hardly alone. The country's device industry has swelled in recent years, boasting 13,000 homegrown companies, and western firms have taken notice. Medtronic ($MDT), Boston Scientific ($BSX), General Electric ($GE) have all invested in R&D there, hoping to cash in on the country's burgeoning medical device field.
- read Mindray's release