In this article I try to explain why most ortho acquisitions are set up for failure from day one.
We read about the wonderful acquisitions in the orthopedics each year (here is a quick list of 231 acquisitions). There are 10-20 notable acquisitions every year. Each M&A press release is glowing.
"We expect our combination with the Company to help accelerate the growth..."
"The acquisition supports the Company's strategy to invest in higher-growth segments... "
"The acquisition builds on the Company's reputation as the leading technology provider for... "
In retrospective analysis, most acquisitions FAIL FOR THE ACQUIRER.
In fact, if you look closely, they were doomed early. They were actually doomed on the day of closing.
Quick story - I witnessed an historic acquisition from the inside. I was on the due diligence team when Sulzer Medica acquired Spine-Tech for $600M. Egos drove the process. The numbers never made sense, but nobody could stop the acquisition momentum. Sulzer overpaid for a spine business that they didn't need. The nosebleed acquisition price sparked the "spine bubble" in 1997 that drove over-valuations for a decade.
As a whole, most orthopedic acquisition...
