Dive Brief:

• Coloplast has struck a €2.2 billion ($2.5 billion) takeover of Atos Medical, giving it control of a portfolio of devices targeted at people who have their voice boxes removed.
• Atos provides a range of heat moisture exchangers (HMEs), devices that sit over an opening in the neck and fulfill functions previously performed by the nose and upper airway. By warming, moistening and filtering inhaled air, HMEs prevent coughing and chest infections.
• The portfolio of HMEs, plus other tracheostomy and laryngectomy devices, generated sales of around $255 million last year. With Atos claiming a more than 80% share of the laryngectomy market, Coloplast sees the company as a growth driver in the coming years.

Dive Insight:

Last year, Coloplast set out plans to drive long-term growth through organic and inorganic activities. The Strive25 strategy led Coloplast to explore acquisitions to grow its chronic care business, resulting in talks with Atos. Coloplast's interest in Atos reflects a belief the niche chronic laryngectomy market has many similarities to its existing chronic patient segments.

Having been bought for €850 million in 2016, Atos reportedly looked into going public at a valuation of $2 billion or more over the summer but went on to accept a buyout bid from Coloplast at a higher valuation.

When the deal closes, Coloplast plans to operate Atos as a separate business with its own "identity, brand and execution strength." Atos will operate on Coloplast infrastructure, resulting in a model designed to support growth through access to "commercial capabilities" and "financial strength."

"Our companies have comparable business models, and the acquisition will enable us to leverage Coloplast's strengths to serve more people living with a neck stoma even better than today," Atos CEO Britt Meelby Jensen said in the deal announcement.

Coloplast's belief that Atos can continue to grow is underpinned by an analysis of the laryngectomy market. The market for the procedure, which entails the removal of the voice box, is underserved, according to Coloplast, with many patients lacking access to adequate products.

The company expects increased patient inflow and improved treatment to drive high-single-digit growth in existing markets and has identified Brazil, Poland, South Korea and China as new opportunities.

The takeover includes recent acquisitions by Atos. At the start of last month, Atos closed the takeover of TRACOE medical, MC Europe and Kapitex Healthcare, giving it ownership of tracheostomy units in Germany, the Netherlands and the U.K.

Jensen framed the takeover as part of an effort to make Atos "a full range global player in the tracheostomy segment."