Published By : 20 Nov 2018 | Published By : QYRESEARCH
Colfax Corporation had made a big challenge to the existing players in the medical device industry with the acquisition of DJO Global Inc. valued at $3.15 billion. Moreover, its market share sudden fell 15.2 % as the investors of the company are highly tensed about its sudden shift from industrial roots to the medical sector.
The company stated that with this purchase the investors are exploring various choices which includes sale of gas and air handing companies that supply largely to gas and oil companies. However, the plan and acquisition to offload the gas and air seems to dishearten analysts.
Company Aims to Capitalize on Lucrative Avenue in Medical Devices
The company main objective behind the acquisition of the DJO Global from Blackstone group is to focus on the increasing demand for medical devices like hip and knee implants by the growing elderly populations in recent years.
Colfax Corporation also believes that the acquisition may help in achieving higher growth, higher margin as per DJO’s analysts statement. However, gas and air handling business helped the company generate 40% of its overall revenue in 2017.
This deal will provide benefit to Colfax after the deal closes in the first quarter of the 2019. After this deal, DJO Global will operate as new sector in the Colfax Corporation. Furthermore, the Colfax Corporation will support DJO Global with fund, equity, and debit.
Colfax experts further states that the profit from the air handling business is unreliable as the global energy projects are massive in scale.
The financial advisor of Colfax is J.P. Morgan. In addition, Wells Fargo Securities LLC, Credit Suisse and Co LLC, and Goldman Sachs are advising DJO Global.