Healthcare Companies Split

Lately there are good number of mergers and acquisition amid Medtech companies for a common rational of being  one stop service providers to hospitals , however there has also been evidence of companies drifting off certain business segments of theirs, calling it a move to make their operation highly focused. Split business segments are either retained by companies or in other cases let go. Below are some of the examples of major splits in Medtech arena :

1. Abbott
2. Phillips
3. Siemens
4. Baxter
5. Agilent Technologies

Below is the rational outline  from each of the company on their act of spin off along with resulting entities that prevailed :

Philips : Company has long been pondering over long lasting strategy to counter healthcare souring sales , we believe they launched their strategy with spin off. Company is splitting its business into two segments , namely Healthtech and Light Business. Former focused at healthcare and consumer products while latter addressed lighting business need.

Abbott : Company spin off it’s drug or pharma business into Abbvie while the segments that remained under the tag Abbott include Medical devices, Diagnostics , Neutraceuticals and Generics.

Siemens : Company had a very strange journey before it made a call  to spin off its healthcare segment. Siemens had let go of its hospital information segment to Cerner , while microbiology system and and hearing aid business to Danaher and equity firms respectively. Now after quiet good number of sell off , company was left with few healthcare divisions( focused on diagnostics)  that it intends to spin off by 2015, however it has no plans to raise IPOs for same – as  per industry claims.

Baxter : Company will split into two , one managing medical business while other handling the biopharma wing. Rational for the split as quoted by organization is” to unlock the potential of both divisions and adapt to rapidly changing business climate”. While the medical segment is likely to retain Baxter International name , biopharma wing name will be finalized sometime soon .

Agilent : Company goes ahead to merge its diagnostics and life science into one business while electronic measurements into others. Agilent has been very focused on its diagnostic account and acquisition of Dako for USD 2.2 billion just proves about how serious company is in regards to its DX growth .Acquisition also helped Agilent bolster presence in companion diagnostic market.

Overall conclusion that we intend make here is that , while Medtech companies do not hesitate to shell out billions for acquisition, they neither hesitate to part off or spin off from segments which they don’t regard as their core focus for future growth.

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