2020 M&A Year in Review: Deal Making Was Low in Volume but High in Impact
Not surprisingly, the COVID-19 pandemic exerted a pronounced chilling effect on M&A activity in the diagnostic space as both buyers and sellers adopted a wait-and-see attitude. But the decline in deal volume belied the strategic significance of the deals that did come off in 2020. Here’s a quick rundown of the year in M&A. What […]
Not surprisingly, the COVID-19 pandemic exerted a pronounced chilling effect on M&A activity in the diagnostic space as both buyers and sellers adopted a wait-and-see attitude. But the decline in deal volume belied the strategic significance of the deals that did come off in 2020. Here’s a quick rundown of the year in M&A.
What Could Have Been
A strong case can be made that the biggest story in 2020 diagnostics M&A were the two blockbusters that didn’t get consummated. The first was Thermo Fisher Scientific’s proposed acquisition of Qiagen. It was all about timing. Confirming months of rumors, Thermo Fisher stepped forward with an $11.5 billion tender offer in March, representing a 23 percent premium over the molecular diagnostics’ firm March 2 closing price. It seemed like a fair price. But then came the pandemic which boosted demands for Qiagen products in COVID-19 testing to unprecedented levels. Defying directors’ recommendations, Qiagen shareholders threatened a revolt and forced Thermo Fisher to up the offer price. But it wasn’t enough. In August, shareholders voted down the offer leaving Thermo Fisher to walk away with the $95 million in compensation provided for in the acquisition agreement in the event the deal got aborted.
The other potential game changer that didn’t happen was Illumina’s proposed $1.2 billion takeover of financially troubled Pacific Biosciences. The resistance of antitrust regulators, particularly in the U.K., created uncertainty and ultimately resulted in a mutual decision to call off the deal. However, PacBio did pocket a $95 million termination fee.
The Top 10 M&A Deals of 2020
There were six different billion-dollar M&A transactions in the diagnostics space in 2020, as compared to only five in 2019. Value-wise, the largest deal was the completion of the $21.4 billion of GE Biopharma by Danaher that was first announced in 2019. Perhaps the biggest surprise was the continued aggressiveness of Exact Sciences which followed up its $2.8 billion purchase of Genomic Health the year before with a pair of Top 10 acquisitions in 2020. Another surprise was Illumina’s $8 billion reacquisition of its liquid biopsy spinoff, Grail, a decision criticized by many shareholders and financial analysts on the basis of both price and strategic fit.
Here’s a rundown of the 10 biggest M&A deals that were closed or announced in 2020:
Top 10 Diagnostic M&A Deals of 2020 (By Deal Value)
|1||Danaher||GE Biopharma||$21.4 billion cash + stock|
|2||Siemens Healthineers||Varian Medical Systems||$16.4 billion all cash|
|3||Illumina||Grail||$8.0 billion cash + stock|
|5||Exact Sciences||Thrive Earlier Detection||$2.15 billion cash + stock|
|6||Invitae||ArcherDX||$1.4 billion cash + stock|
|8||Exact Sciences||Base Genomics||$410 million|
|9||PerkinElmer||Horizon Discovery Group||$383 million cash*|
|10||Qiagen||NeuMoDx||$248 million cash|
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