Just catching up again...
Livendi, Medtronics is in the business of acquisitions for growth. It is Mr. Martha's self-proclaimed future legacy. From a MassDevice.com article:
Analysts asked if Medtronic might begin using its resources to acquire more businesses. Martha agreed the company’s strong financial position coupled with the likely decline in prices for outside businesses makes this an opportune time to acquire businesses that can add to the company’s growth.
Martha said Medtronic won’t wait for the dust to settle to begin acquiring companies. “We believe healthcare and medtech, the areas we’re in, are going to come back, and we believe by our Q4 that our revenue growth on a two-year stacked basis will be back to normal levels of profitability.”
“We feel this is a hit, a difficult financial impact for everybody, but we do feel bullish for the market and for us as well so we won’t hold back,” he said. “We’re looking mainly for tuck-in deals that are going to create long-term improvements to our weighted average market growth rate and to allow us to better position ourselves strategically.” Martha said Medtronic will look at deals of all sizes.
From MedTechDive.com:
Despite the negative financial impacts of COVID-19 on its revenue in the latest quarter, Medtronic has its strongest balance sheet in years and is looking to take advantage of the potential opportunities created in the medtech industry for acquisitions.
Martha told investors on Thursday's earnings call that Medtronic is poised to increase its merger-and-acquisition activities amid the uncertain environment, indicating financial pressures on smaller medtech companies could present buying opportunities.
"There are some opportunities that — at least I felt personally, were out of our reach, too expensive before this, and now are kind of more in line with what we think are reasonable returns for those investments," Martha said.
With asset prices down across the industry, Martha said Medtronic is looking to "play offense" with tuck-in acquisitions that could bolster the company's long-term growth.
While Martha said the company is looking for deals of all sizes, he said he prefers acquisitions in the "medium, billion-dollar" range because they have a bigger impact on Medtronic's growth rate.
Medtronic has the means at its disposal to execute on such a strategy. As of the end of its fiscal fourth quarter, the company has $10.9 billion in cash and investments as well as an undrawn $3.5 billion credit facility, with no public debt maturing until March 2021.
"We don't buy growth, we grow what we buy and so that's what we're focused on," Martha added.
Medtronic won't let Titan slip away. It's not how they work. And it is even more of a focus for them now than it had been during the prior 60+ acquisitions.
