At a recent event held by The Medical Development Group (MDG), a panel of speakers spoke to device startups about the state of M&A activity in 2009.
Daniel Lepanto, Managing Director of Mergers and Acquisitions for Leerink Swann spoke about the availability of investment money to make deals. Amarpreet Sawheney, PhD, President and CEO of I-Therapeutix spoke from the entrepreneur’s perspective on how to make your company more attractive, and generate competition among suitors. And Don Haut, PhD, Senior VP Strategy and Business Development for Smith and Nephew Endoscopy spoke from the buyer’s perspective about what exactly takes place behind closed doors during a deal, and why it takes so long.
The panel presented a compelling picture of the dynamics involved in an acquisition, but my interest is in branding and marketing, so you might think there was little to take away from the presentation. Two points were made that speak to the importance of branding.
1. In this market, there are just not that many companies looking to buy and those who are are in a clearly advantageous position. Dr. Sawheney cautioned entrepreneurs not to simply jump at the first offer, and in fact, to be prepared to go back and continue to build the business. To me, that not only means research and development, it also means that companies must continue the work of positioning and branding their products.
2. As someone personally responsible for acquisitions for Smith and Nephew, I asked Dr. Haut whether or not the state of a company’s brand is taken into account when determining its value. He replied, “A company with a strong brand is nearly always more valuable than one without a strong brand.”
It seems that branding is one of the last things that young companies think about. And who can blame them with so many other pressing issues on their plates? But companies who get it right add real value to their business.
Branding is an investment that will show real returns whether the company chooses to take their device to market, or whether they ultimately find themselves in a position to be acquired.