PE is very popular in medical device industry

2013-05-06 source: in the healthcare industry of China Securities Journal, medical devices are the industry with the largest market potential, with a compound growth rate of more than 20% in recent years, and the market size is expected to exceed 300 billion yuan in 2015 Venture capital institutions are flocking to the promising medical device industry, and the total transaction amount of private financing cases in 2012 has tripled year on year In the past year, under the background of blocked IPO exit channels, listed companies have significantly increased their participation in M & A of small medical device enterprises, and M & A has become the main way for venture capital institutions to achieve exit The fitbitone, the PE touted $99 pedometer in the medical device industry, is an expensive pedometer called a lifestyle changing product for tech nerds who stay indoors This personal portable health device, which has only been launched for more than 3 years, has not only set off an upsurge of sports health, but also become a new favorite of venture capital institutions According to the latest news, Fitbit has just received a $30 million financing, and the current corporate valuation is as high as $300 million A health tracking device can leverage hundreds of millions of dollars in investment Fitbit's expanding development reflects the huge potential of today's medical device industry According to the information delivered at the second CEO Summit on medical device industry development and investment just concluded at the end of April, the sales volume of global medical device market increased from US $187 billion in 2001 to US $355.3 billion in 2009, with a compound growth rate of 8.35% In 2012, the market scale of China's medical device industry was about 150 billion yuan, with a compound growth rate of 21.3% in the past 10 years In China, medical devices have become one of the most private and venture capital focused industries In 2012, the number of private financing cases of medical devices ranked second in the field of medical health The total investment amount of 18 transactions was 848 million yuan, with the transaction amount doubling year-on-year, accounting for 17.51% of the total transaction amount of the medical and health industry, up from 2.46% in 2011 On March 5 this year, Qianji venture capital, a venture capital fund focusing on health care industry investment, announced that it had completed the round a financing of Shanghai Aohua optoelectronic endoscope Co., Ltd At present, 80% of the soft endoscope market is monopolized by three Japanese enterprises, of which Olympus has more than 60% market share all over the world Qianji venture capital said that minimally invasive treatment and diagnosis have been widely recognized in clinical practice, and it is very optimistic about this potential market Nanjing minimally invasive, another maker of endoscopes, also received a capital injection from a private fund, UnionPay, in January According to the investment of UnionPay, the global market size of endoscope consumables in 2011 is about 4.4 billion US dollars, and it is expected to reach 7.6 billion US dollars by 2017, while the domestic market of endoscope consumables will achieve a compound annual growth rate of 20% in the next five years In fact, minimally invasive medical care is only one aspect of the concern of venture capital institutions According to the heads of Tongchuang Weiye, Qiming venture capital and other institutions, silk artificial blood vessels, remote-control capsules, cancer screening devices and many other fields will become hot spots in the development of medical device market M & A investment in the new mainstream A-share market has been stranded for a long time, which has blocked the original main exit channels of venture capital institutions Therefore, it has become a "wise" choice to resolve capital risks and collect funds through M & A At the same time, most of the listed medical device enterprises are small in scale Based on the demand of extending the industrial chain and capacity expansion, M & A of upstream and downstream enterprises has become the fastest effective means In the past year, M & A of medical device listed companies has been frequently seen in the newspapers Through the acquisition of Jin Weifan, Lepu medical has been able to enter the field of angiography machine, and use its strong sales channels in the field of Cardiology to expand the industrial chain In November 2012, Lepu medical released the acquisition announcement again, and planned to purchase 44.6% of Qinming medical's shares at a price of 113 million yuan, so as to become the controlling shareholder Qin Ming medicine, which is mainly engaged in cardiac pacemaker, was acquired by Lepu medical in 2010 with a 30.46% equity, with a valuation of only 11.57 times After two years, the valuation of this acquisition has climbed to 26.14 times In addition, in 2012, TCL group, together with Haoran capital, established TCL medical group, including the previously acquired Beijing Guoyao Hengrui Meilian company, mainly engaged in the production and sales of high-quality medical imaging diagnosis products including X-ray, ultrasound equipment, CT, etc An investment partner of Softbank China said that compared with pharmaceutical R & D companies, the development cycle of medical device industry is short, the investment return is fast and the risk coefficient is low, so PE / VC is willing to invest in the growing medical device companies In the face of IPO delayed to open, it is a win-win choice to complete exit through M & A of listed enterprises Considering the time cost, the income of PE / VC M & A exit is not low Not only are venture capital institutions keen, but foreign medical institutions are also keen to acquire Chinese medical device enterprises due to the impending implementation of universal medical insurance in the United States and the demand for low-cost medical device production bases In September 2012, Medtronic, a leading medical technology company in the industry, spent $816 million to acquire Conway Holdings (China) Co., Ltd In October, Medtronic bought another 19% stake in Shenzhen Xianjian Technology Co., Ltd and obtained the right to distribute its products "The increasing demand for medical devices is driven by factors such as the increasing coverage of medical insurance, the aging of the society, and the increasing popularity of medical devices, which is a rare opportunity for Chinese medical device and device enterprises, and will stimulate venture capital institutions and medical enterprises to join the ranks of investment and M & A," said analysts from Qingke research center