MedTechDive
Dive Brief:
Colfax has struck a $3.15 billion all-cash deal to acquire DJO Global, a manufacturer of orthopedic bracing and rehabilitation systems.
The acquisition moves industrial technology conglomerate Colfax into a new sector, medical devices, in a bid to increase its exposure to a market that has higher growth and margins than some of its existing areas of operation.
Colfax’s founders and CEO have experience in the medical sector from their time at Danaher, but investors nonetheless reacted negatively to the deal, sending the buyer’s stock down by 15%.
Dive Insight:
DJO is changing hands again. Having been acquired by Blackstone in 2007 — a very active year for private equity buyouts — DJO is now set to become a new business segment within Colfax. DJO will slot in alongside Colfax units that target the welding and air and gas handling sectors.
Colfax’s existing businesses generated $2.7 billion over the first nine months of the year, an increase of 10% over the comparable period of 2017. However, Colfax thinks it will benefit from moving into medical devices and, potentially, transitioning away from its air and gas handling focus. Colfax believes the same fun...
