UPDATED: Baxter buys $9.5M startup on heels of $4B Gambro deal

Days after closing its nearly $4 billion Gambro acquisition, Baxter ($BAX) has snatched up a tiny Israeli startup for what amounts to pocket change in comparison.

Baxter, an Illinois-based marker of renal devices and other medical equipment and treatments paid $9.5 million for FlowSense, an Israeli startup launched in 2009 that makes medical equipment designed to monitor urine output. FlowSense's founder, the incubator and investor known as Trendlines, notes in its announcement of the deal that the company has already sold products in Europe, the U.S., Israel and China.

The small, strategic buy makes a lot of sense on many levels. Israel is becoming known as a place where investors are tapping into new med tech startups, and companies also see them as potential acquisitions through which to boost their own product lines. In 2012, for example, Covidien snatched up PolyTouch (also a Trendlines portfolio company) for an undisclosed price. The much larger Given Imaging ($GIVN), maker of the increasingly popular PillCam endoscopic devices, also tried to sell itself in the recent past before pulling back from the move (for now). And there are many others. What Israel has, the global med tech community wants.

But that's the macro level. On the micro side of things, Baxter is continuing to boost its renal offerings in smart ways. The far more obvious way this happened was with Baxter's $3.9 billion acquisition of Gambro, giving it a much larger position in the hemodialysis market through their combined renal products and therapies. Baxter's tiny, targeted bid for FlowSense also helps expand its renal offerings. Equipment that helps provide continuous monitoring of urine output (FlowSense's main product is called Urinflo) will give Baxter an important, technological boost in this area.

A Baxter spokeswoman had this to say about the acquisition in an email statement to FierceMedicalDevices:

"Baxter recently completed its planned acquisition of FlowSense Medical in Misgav, Israel, and the automated URINFO2000 fluid monitoring system, which supports our commitment to patient safety and long-standing leadership in fluid delivery and management systems. The URINFO2000 is an important bedside advancement in reducing errors that can occur when urine output volume is infrequently monitored and inaccurately measured." And there you have it.

- read the release

Special Report: How did Israel become a hotbed for medical devices?

Editor's note: This story was updated to include a statement from Baxter about its FlowSense acquisition.