Device company Mindray Medical International Limited, is to acquire a controlling stake of Wuhan Dragonbio Surgical Implant Co., Ltd. (“Dragonbio”), a domestic medical orthopedic products provider that specialises in trauma, spine, joint and other surgical products. The transaction is expected to be closed in July.
Founded in 1991, Mindray has three well-established business segments: Patient Monitoring and Life Support Products, In-Vitro Diagnostic Products and Medical Imaging Systems.
Founded in 2005 and based in Wuhan, China, Dragonbio sells medical orthopedic products solely in China and achieved total revenues of approximately US$7.7 million in 2011.
Under the agreement, Mindray will pay a total purchase price of approximately US$35.5 million, which will be funded through Mindray’s existing cash reserves.
Orthopedics is one of the largest medical device market segments worldwide. Based on Mindray’s estimates, the global orthopedic market was valued at approximately US$30 billion in 2011, with an annual growth rate of around 8%, all of which has no doubt influenced its decision to tap into the market.
Furthermore, according to Frost & Sullivan, a research and consulting firm, the market size in China was approximately US$1.1 billion in 2010 and is rapidly growing with a projected CAGR of over 18% from 2010 to 2015.
Mindray clearly expects to benefit from the access this acquisition will give it to the fast growing Chinese orthopedic market and will hope it will also help it expand into additional international markets in the future.
“We are excited about this transaction and are pleased to offer more products to our customers,” said Mr. Minghe Cheng, Mindray’s Chief Strategic Officer. “The orthopedic consumable market has high barriers to entry, but this deal will give us instant access to this promising and sizable market. We expect to unlock the value of the acquired business through our strong capital position, large-scale operational experience and worldwide presence.”
Source: Mindray Medical International Ltd., PR Newswire