On July 22, global medical device giant Cook Medical announced that it had signed a letter of intent with Astorg, a leading global private equity firm.will acquire Cook Medical’s reproductive health business (“Cook ART”) for USD 300 million (equivalent to RMB 2.18 billion).The sale, which includes in vitro fertilization (IVF) and assisted reproductive technology (ART) products, marks another step toward realizing Cook Medical’s future vision.
The business being sold this time is the one that Cook Medical attempted to sell its reproductive health division to CooperCompanies for $875 million (equivalent to RMB 6.36 billion) in 2022. At that time, Cook and CooperCompanies had reached a preliminary acquisition agreement; however, after the Federal Trade Commission launched an investigation into anti-competitive practices related to the sale, both companies abandoned the proposed transaction in August 2023.
The transaction amount was reduced to $300 million, while Cooper Surgical acquired Cook Medical’s obstetrics, Doppler monitoring, and gynecological surgery franchises.
Seeking Sale for 6.36 Billion: A Reversal Upon Reversal
For over 40 years, Cook Medical has been dedicated to reproductive health, successfully developing products for obstetrics and gynecology, in vitro fertilization (IVF), and assisted reproductive technology (ART). A pioneer in reproductive health innovation, Cook Medical helps patients realize their dreams of building a family, including by developing the first needle specifically designed for IVF treatment.
On February 8, 2022, Cook Medical announced that it had reached an agreement to sell its reproductive health business to Cooper Companies.Cook Group will pay $875 million to acquire the franchise.Of this, $675 million is payable at closing, and $200 million is payable in installments over four years.
However,The U.S. Federal Trade Commission, however, launched an investigation into the acquisition to determine whether the transaction had potential anti-competitive effects.
Cooper Group is a leading fertility and women’s health technology company dedicated to advancing the health of women, infants, and families, with a diverse portfolio of products and services focused on women’s health, fertility, and diagnostics. The acquisition of Cook Medical would be a significant complement to its business if completed.
In August 2023, Cooper Companies announced the abandonment of this acquisition; however, Cooper Companies has demonstrated what could be described as "true love" for Cook Medical.Just three months later, the acquisition saw another major turning point.
On November 1, 2023, CooperSurgical announced the completion of its acquisition of certain assets from Cook Medical, primarily involving businesses in the obstetrics, Doppler monitoring, and gynecologic surgery markets.Other departments within Cook Medical’s original organizational structure will continue to operate as a privately held family-owned business. The acquisition price is $300 million, with $200 million paid upon closing of the transaction and the remaining $100 million paid in two annual installments of $50 million each.
In this transaction, the assets acquired from Cook Medical primarily consist of minimally invasive medical devices, including the Bakri® Uterine Balloon Tamponade, Cook’s Cervical Dilation Balloon, a portfolio of Doppler blood flow monitoring products, and other surgical products. As of September 30, 2023, the acquired assets generated approximately USD 56 million in revenue over the preceding 12 months.
2.18 billion, tender offer accepted again
The acquisition by the private equity group Astorg for €300 million marks the completion of Cook Medical’s divestiture and sale of its former reproductive health business line.The two transactions totaled approximately $600 million, representing a “discounted” sale by Cook Medical to further achieve its strategic objectives, compared to the previous valuation of $875 million.
Private equity firm Astorg has extensive experience in medical technology investments. The private equity company plans to combine the Cook ART portfolio with Hamilton Thorne’s range of precision instruments, consumables, software, and services to enter the fields of ART research and cell biology.
Cook stated,Upon completion of the transaction, 93 employees from the Reproductive Health division will receive employment offers from the new company or be automatically transferred to it.The transaction is expected to be completed in the fall of this year.
The transaction also includes Cook’s manufacturing facility in Vandergrift, Pennsylvania. Upon closing, there will be a three-year transition period during which Cook will continue to provide manufacturing services at the site.Subsequently, all 309 employees of the factory will be transferred to the merged company.
“Cook is focused on our vision of continuously delivering innovative products and services to meet unmet customer needs. Part of executing this business strategy involves reviewing our product portfolio to determine which product lines are best suited for Cook’s future growth and which may have greater opportunities for expansion or prosperity elsewhere,” said DJ Sirota, Senior Vice President of the MedSurg division at Cook Medical. “Astorg plans to establish an IVF/ART manufacturing center at its facility in Vandergrift, Pennsylvania, creating a core production hub for Cook’s ART products.”
5-Year Vision and Plan, Including Business Divestiture, Workforce Reduction, and Partnerships
Cook Medical is a medical device company from Indiana, United States, founded in 1963 by Mr. Bill Cook and his wife. Its extensive product line covers various medical fields, ranging from cardiovascular to gynecology and reproductive health.
Cook Medical has adhered to its family-owned business model since its establishment. Cook Medical’s products have been present in the Chinese market for over 30 years. In 2008, Cook (China) Medical Trading Co., Ltd. was established in Shanghai. Currently, Cook China maintains two offices in Shanghai and Beijing, with the Shanghai office serving as its operational headquarters.In addition to the sale of its reproductive health business, in January 2014, Cook Medical announced that, as the latest decision in its five-year strategic plan, it had entered into an agreement with C2Dx, Inc. (a portfolio company of Shore Capital Partners) to sell its remaining OHNS product portfolio to C2Dx. The agreement does not include employees, facilities, or manufacturing equipment.On May 15, 2023, Cook Medical announced that it would lay off 500 employees as part of a plan to refocus on product innovation. This reduction represents 4% of the company’s global workforce and includes 223 employees in the United States and approximately 123 employees at Cook Ireland, Ltd., among others.
In response, Cook Medical stated that the company has undergone significant changes in its customer base, supply chain, and operational methods. To ensure future success, its global leadership team has implemented a new five-year vision and strategic plan, developed based on extensive feedback from customers, employees, and the leadership team.The so-called five-year vision and strategic plan have been repeatedly mentioned, with Cook Medical clearly stating in its strategic plan that, will determine which product lines are best aligned with the company’s strategic direction by reviewing its product portfolio.As part of the strategic plan,Divestiture and LayoffsIt will also serve as a key measure for strategy implementation.
Cook Medical has also adjusted its Asia-Pacific leadership structure to strengthen collaboration with physicians and focus on regional business development. For example, Mr. Thomas was appointed as Vice President and Acting Director of Cook Japan to ensure alignment between Cook Japan’s operations and the needs of Cook’s Asia-Pacific and global functional departments.
Cook Medical Releases 2023 Social Impact and Sustainability Report, Emphasizing Its Commitment to Achieving Sustainability and Responsible Operations Across All Business Activities. This Demonstrates the Company’s Focus on Social Responsibility and Environmental Protection While Pursuing Commercial Success.
Divestiture Becomes a Key Tool for Corporate Strategic Restructuring
Besides Cook Medical, there have been frequent acquisition and divestiture activities in the medical device sector recently.
BD's Former Diabetes Unit Embecta Up for Sale
According to the Financial Times, on July 22, Embecta (NASDAQ: EMBC), the former diabetes division of BD, hired advisors to explore a potential sale of the company.
During today’s early trading session, EMBC’s stock price rose 16.5% to $15.34 per share. Since completing its spin-off from BD in April 2022, the company has operated as an independent publicly listed entity. Throughout this period, it has consistently pursued performance growth, focusing on the GLP-1 market and insulin delivery technologies. However, it now appears that the company may also be headed toward a sale.
Dental Giant ZimVie Seeks Sale
Recently, South Korean dental implant manufacturer Osstem Implant has been engaged in in-depth negotiations regarding the acquisition of ZimVie (NASDAQ: ZIMV). Osstem has submitted a final acquisition offer and secured financing for the potential transaction.In March 2022, Zimmer Biomet, a giant in orthopedic medical devices, spun off its spine and dental businesses into a publicly traded company, giving rise to ZimVie. In December 2023, ZimVie sold its spine business, becoming a pure-play dental company. The sale was officially completed in April 2024. In June 2024, foreign media reported that after receiving an acquisition offer, ZimVie stated it was considering “selling itself.”Global Precious Metals Giant Sells Medical Device Business
On July 1, 2024, global precious metals giant Johnson Matthey announced that it had completed the sale of its Medical Device Components (MDC) business. Private equity firm Montagu paid $700 million in cash (approximately RMB 5.075 billion) for the business on a "cash-free, debt-free" basis.
This medical device components business manufactures components for global medical device manufacturers, with a focus on precious metal alloys and Nitinol, including the medical device manufacturing operations operated by Johnson Matthey in the United States, Mexico, and Australia.When discussing the objectives behind corporate divestitures, it is essential to recognize that, in the current macroeconomic climate, such moves are primarily driven by the goals of monetization and focusing on high-growth core businesses. Some companies optimize their product portfolios by divesting certain product lines, thereby concentrating on areas with greater potential and growth opportunities. Monetization serves as another key objective for many enterprises, particularly amid economic uncertainty or in the post-pandemic era, where businesses seek to achieve higher valuations through asset sales to meet their financial needs.Due to the impact of policies such as medical insurance negotiations and “volume-based procurement,” many multinational corporations have lowered their expectations for future profits from certain products in China and have chosen to divest these businesses to cope with market pressures. Furthermore, initiatives by both the government and the private sector to control healthcare costs have also prompted some companies to sell off related business units.
Meanwhile, to maintain competitiveness, some companies need to continuously innovate and acquire advanced technologies. By divesting certain business units, they can concentrate resources and capital on research and development and technological innovation, thereby enhancing their overall competitiveness.
Medical Device Innovation Network will continue to closely monitor how Cook Medical implements its five-year vision and plans in the healthcare sector!
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