Medical Device Link.

Let’s take a quick look back at some recent history in the IVD industry. In 2006 and 2007, the industry underwent an unprecedented massive consolidation. The primary player was Siemens Medical Solutions Diagnostics (Tarrytown, NY), which spent a total of more than $14 billion to acquire three top-tier IVD companies: Diagnostic Products Corp., Bayer Diagnostics, and Dade Behring Inc. Other major mergers during this time period included Hologic Inc. (Bedford, MA) buying Cytyc Corp. for $6.2 billion, and Qiagen NV (Venlo, The Netherlands) purchasing Digene Corp. for $1.6 billion.

While 2008 was a comparatively quiet year regarding mergers, the IVD industry in 2009 has seen yet again another major acquisition. Beckman Coulter Inc. (Fullerton, CA) and Olympus Corp. (Tokyo) reached an agreement under which Beckman will buy Olympus’ diagnostic systems business for $800 million.

One might wonder how Beckman Coulter was able to secure the financing and obtain the proper credit to acquire Olympus during what is considered to be the worst economic crisis since the Great Depression. According to Beckman officials, the company took a conservative approach to financing this acquisition. Beckman Coulter is planning to use debt to the extent that it can, and supplement that debt with a judicious use of equity by issuing stock. Beckman has made a concerted effort to maintain its ratings with the ratings agencies, and under the intended financing structure, the company does not anticipate a change in its current investment grade ratings.

On one hand, Beckman Coulter should be commended for going through with this deal, despite the poor state of the economy. On the other hand, Beckman’s actions are an encouraging sign for the IVD industry as a whole. Similar to Siemens’ acquisitions a couple of years ago, Beckman has demonstrated a strong belief that there continues to be a bright future in IVDs. While the industry may not undergo any high growth this year, it should be able to maintain a steady level of progress overall, despite the problems that plague the global economy.

Editor’s note: IVD Technology has launched its new blog, IVDT Insight (ivdtechnology.com/blog). Written and produced by the editors of IVD Technology, IVDT Insight analyzes the latest-breaking headlines, offers informed commentary on the hottest industry topics, and provides a forum for our readers’ opinions and feedback. This blog also delivers emerging technology breakthroughs, regional diagnostic information, supplier and industry news, and everything else that IVD companies need to know to assist them in their design and manufacturing activities.

In addition, you can stay up-to-date on the latest “Breaking Industry News” that is updated daily by visiting IVD Technology’s home page at ivdtechnology.com.