M&A Trends in the Medical Device Industry
Company: Vieira de Almeida & Associados Name: Rita Marques M&A HealthCare, Senior Advisor Email: firstname.lastname@example.org Web: http://www.vda.pt Address: Av. Eng. Duarte Pacheco, 26, 1070-110 Lisbon, Portugal Telephone: +351 21 311 3400
M&A Trends in the Medical Device Industry VdA’s M&A HealthCare Department has been very active in most of the significant M&A transactions carried out in the Portuguese pharmaceutical sector including worldwide transactions which impact in several jurisdictions.
Concerning medical devices, as recently supporting Johnson & Johnson in the transfer of Cordis and of the OrthoClinicDiagnostics, VdA ran in close cooperation with firms and advisers from other jurisdictions and the client’s business teams. In whatever medical devices transactions are concerned, irrespectively of the parties involved, some common issues and requirements must be accomplished to close a deal satisfactorily. “Recently in Portugal, rather than just pure M&A transactions, these transfers have been including the business unit as a whole, with all respective assets, liabilities and employees and made as a Transfer of Business as a Going Concern (“TOGC”)” explains M&A HealthCare Senior Advisor Rita Marques.
Apart from the competition, corporate and tax issues applicable to a TOGC, “one of the main singularities from a Portuguese regulatory perspective, is that the distribution of medical devices is heavily regulated and more demanding than in other EU jurisdictions” Rita Marques emphasises. “As an example, specific requirements must be complied with, and clearance from the Portuguese Agency obtained – such implying, amongst others, the need to have adequate facilities and equipment for the storage and distribution of medical devices and the appointment of a technical director with adequate qualifications to ensure the quality of the activities.” Legal issues and contracts TOGC is also subject to labour law Rita Marques explains, “some written information on the transfer must be served to the employees, directly or through their representative bodies. When the transfer becomes effective, the seller’s employees will automatically become employees of the buyer, on the very same terms and conditions” she outlines. “Also from a Portuguese law perspective, TOGC implies that all business unit contracts are assigned to the buyer. Such assignment depends on the prior consent of the counterparty, regardless of the contracts’ public or private nature. “In public contracts, a proposal of assignment is to be submitted to the counterparty, where the buyer undertakes to comply with all contractual obligations and presents the same qualification documents the seller presented under the awarding procedure at stake. “It is of the essence to timely analyse the contracts in force and assess the specific requirements to accomplish. In fact, while the assignment authorisation is not received, the seller is bound by the contractual obligations set forth therein.” Understanding the client “In these M&A HealthCare transactions, VdA is proud of its experienced M&A HealthCare multidisciplinary team, which include members of other VdA practice areas such as labour, competition, tax, public procurement, data protection and life sciences” Rita Marques explains. “This M&A HealthCare team, by understanding client’s business and concerns, anticipating obstacles, combining experience with innovation and swiftly finding solutions is at all times happy to team up with clients for achieving their goals!” Rita Marques concludes. Acquisition International - December 2015 109