The merger was meant to result in a $9 billion-plus company but it never happened.
This would have given a stronger boost to healthcare in California and the US if the deal has stood.
Smith’s Group Plc, a British engineering company and its US-based counterpart, ICU Medical Inc. had been on a merger talks for a while now but it was announced sometime later that the deal failed to pull through for some reasons.
This is not the first time healthcare facilities that are California-based are getting into merger talks.
Some in the past have been successful and doing well in healthcare provision in California.
The Two Companies
ICU Medical specializes in devices used in oncology and infusion therapy. Smith Medical is a UK-based hospital equipment provider including industrial services, and also sensors to detect explosives.
Smith Medical is a medical unit of the Smith Group Plc. The merger is intended to merge Smith’s medical division of the Group with ICU Medical and not the whole of the Smith Group.
According to Smiths Group, talks on the merger collapsed because both parties did not agree on terms.
Smith Group commented that the board is quite aware of each company’s strength. That said, the board was mindful so that the union did not undervalue the group and its prospects.
During the time, shares of Smith closed 0.2% at 15.765 pounds after a poor run of five months low. ICU medical also fell about 8% to $278.5 on Nasdaq.
ICU Medical, a company located in California has a good history with acquisitions judging from the past transactions they’ve had with some companies.
It acquired top shares in Pfizer Inc infusion therapy outfit in 2016. The company also bought Medical Australia Ltd MLAAX, a medical device company in 2017 to have got some experience with what merging requires. The collapse of talks with Smith on the alliance could have a lot to do with valuation and performance of the company.
What May Not Be Working Well For Smith Medical?
The struggle is more on the side of Smith Medical over the past years. ICU Medical is relatively stable and doing quite well in the healthcare industry in California.
Smith Medical has been through some ups and downs in their businesses lately. It has suffered some delays in new product launch on one hand and some products losing certifications with new regulations on the other hand.
This also includes the missing out on two contracts in the United States.
The struggle has spanned about 10 years, according to reports. The move towards alliance should be in a bid to bring new innovation and breathe of newness to the organization’s performance.
The collapse in the merger move was expected in some quarters due to the poor performance of Smith’s share price in the exchange market that closed seriously flat under the period in review.
With the collapse of talks on the ICU Medical and Smith’s merger, Smith Medical management believes things can be better and the talks can be renewed probably sometime in the future.