Abbott Laboratories ($ABT)
CEO: Miles White
Based: Chicago, IL
2015 sales: $9.6 billion
2014 sales: $10 billion
Until 2016, Abbott ($ABT) had been doing small deals around the edges of med tech. But now it's in the midst of two of the largest deals in its history--one for almost $6 billion for diagnostics company Alere ($ALR) and a second purchase of cardiovascular device player St. Jude Medical ($STJ) for more than $25 billion.
It's not quite clear that Abbott can afford to do both deals simultaneously. In fact, credit rating agency Moody's issued a report threatening to downgrade the company's credit rating if it proceeded with both. And the Alere deal may already be fraying at the edges; the Dx player reported that it turned down a $50 million payment from Abbott to break off the deal.
But Abbott obviously needs to do something to kick growth into gear after its split from R&D therapeutics-focused AbbVie. After the split, Abbott was left with Diagnostics, Nutrition, Established Pharmaceuticals and Medical Device businesses. So med tech seems a no-brainer for igniting growth.
Abbott's deals with startups in recent years focused mainly on cardiac electrophysiology as well as in mitral valve repair and replacement--two segments that are expected to be sizable and grow quickly. St. Jude would seem a natural complement, with its leadership in cardiovascular, to really help capitalize on those earlier deals. Abbott already has some strong performance in its Vascular business--with double-digit growth in the first quarter for its MitraClip, a minimally invasive treatment of mitral regurgitation.
The St. Jude deal is slated to close in the fourth quarter, while the Alere deal was originally expected to also close by year end.
-- Stacy Lawrence (email | Twitter)
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