Medical technology companies turn to mergers and acquisitions to drive growth Medical technology companies have increasingly looked to improve profit margins amid enhanced competition and a tepid economic climate. Medical technology companies have worked to achieve business cost reductions and improve revenue flow through mergers and acquisitions, with the value of such deals surging over the past few years.

Businesses are turning toward mergers and acquisitions as a means of overhauling their strategic sourcing and retail sourcing programs. The value of M&A activity by medical technology companies in the U.S. and Europe has surged in value, more than doubling to $30.6 billion in 2010 compared to the year prior.

Bloomberg reports the trend has continued this year, as accounting firm Ernst & Young estimates such transactions have totaled $47.3 billion through the first nine months of 2011. Contributing to that figure is Johnson & Johnson's $21.3 billion bid for Synthes Inc.

Aside from blockbuster deals, the number of mergers and acquisitions within the medical technology sector has climbed, jumping from 171 in 2009 to 201 last year. Many industry experts project the trend will persist, as companies are loath to invest in initial state technologies as regulatory agencies intensify their scrutiny of new products.

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