Enpath (NPTH) was forced to give up its independence because it wasn’t getting enough attention from analysts. That’s what CFO Scott Youngstrom told the Pioneer Press following Monday’s announcement that Enpath would be acquired by Greatbatch (GB) for $102 million.
“With a market capitalization of about $70 million before the deal was announced, Enpath Medical wasn’t large enough to get the attention of many stock analysts who follow medical-technology companies,” Youngstrom told the paper. “That lack of visibility limited Enpath’s independence.”
And Thomas Letscher, a Minneapolis attorney with Oppenheimer Wolff Donnelly, told the Press that Enpath is not alone in its struggle to stay afloat on its own. He said other public med tech companies with market caps under $200 million have wrestled with the same problem over the last 10 years.
“Part of the problem,” he told the paper, ”is that consolidation among investment banks has meant the surviving analysts often must focus their limited time on larger medical-technology companies.” He explained, “In the mid-1990s, there were companies going public in the pre-revenue stage. That’s not really the case any more, or it’s certainly significantly more difficult for that to happen.”
Source: Med Tech Sentinel