Mindray Enters Orthopedic Market with Latest Purchase
Medical device maker Mindray Medical International Ltd. is buying Wuhan Dragonbio Surgical Implant Co. Ltd., an orthopedic products provider that specializes in trauma, spine, joint and other surgical products. Under the agreement, Mindray will pay approximately $35.5 million in cash. The transaction is expected to close in July. Mindray expects the deal to have minimal impact on its 2012 financial results and maintains its annual financial guidance on revenues and non-GAAP net income growth.
Founded in 2005 and based in Wuhan, China, Dragonbio sells medical orthopedic products solely in China and has revenue of $7.7 million in 2011. Orthopedics is one of the largest medical device market segments worldwide. Based on Mindray's estimates, the global orthopedic market was valued at approximately $30 billion in 2011, with a compound annual growth rate (CAGR) of around 8 percent. According to research and consulting firm Frost & Sullivan, the market size in China was approximately $1.1 billion in 2010 and is rapidly growing with a projected CAGR of more than 18 percent from 2010 to 2015.
Mindray expects to gain access to the fast-growing Chinese orthopedic market and potentially expand into additional international markets in the future.
"We are excited about this transaction and are pleased to offer more products to our customers," said Minghe Cheng, Mindray's chief strategic officer. "The orthopedic consumable market has high barriers to entry, but this deal will give us instant access to this promising and sizable market. We expect to unlock the value of the acquired business through our strong capital position, large-scale operational experience and worldwide presence."
Orthopedics is a new sector for Mindray. The company currently operates in three primary business segments: patient monitoring and life support, in-vitro diagnostic, and medical imaging systems. The company’s global headquarters are in Shenzhen, China, while U.S. headquarters are located in in Mahwah, N.J. Most of the manufacturing and engineering is done in China.