Venture Capital: Medical Device 'Big Exits' on the Rise


"The device industry notched 18 'Big Exits,' beating biotech's 17 and extending an upward trend in exit activity in the life sciences, with more than 25 per year since 2009."


Mass Device

Venture-backed M&A activity in 2011 was higher than any other year since 2005, according to a new report tracking trends in life sciences.

The medical device industry in 2011 had 18 "Big Exits," defined as venture-backed acquisitions where the up-front payment totaled $75 million or more.

"Not only has Big Exit M&A activity increased in number, but in up-front value as well," according to the report. "This positive surge in M&A exit activity has created substantial returns to the venture community."

The device industry notched 18 Big Exits, beating biotech's 17 and extending an upward trend in exit activity in the lifesciences, with more than 25 per year since 2009.

"The current environment has paved the way for less structure in device M&A for two main reasons," the report added. "First, the majority of these exits occur with de-risked, post-FDA approved devices where there is really no reason other than commercial uncertainty to structure a transaction. Second, based on the current life science fund-raising environment where distributions are at a premium and are required to raise a new fund, many device investors would prefer to get the immediate gratification of an all-in deal structure paid at deal close and entirely within their control, rather than wait on potential bigger pay-outs based on back-end revenue milestones.". . .View Full Article

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