Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dexcom Reportedly in Talks to Acquire Insulet, Analyst Cautious

Stock Markets May 24, 2022 08:19AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. DexCom (DXCM) Reportedly in Talks to Acquire Insulet (PXCM), Analyst Cautious

By Senad Karaahmetovic

Dexcom (NASDAQ:DXCM) is in talks to buy out diabetes device maker Insulet Corp (NASDAQ:PODD), according to Bloomberg.

The two companies are currently negotiating the deal and an agreement could be reached over the following weeks. However, there are no guarantees that the deal will be closed, the report said.

As of Monday’s close, Insulet and Dexcom had market valuations of $14.1 billion and $31.8 billion, respectively.

The negotiations between Dexcom and Insulet come in the midst of a significant slowdown in dealmaking in the healthcare sector, after years of thriving as insurance and pharmaceutical companies, as well as medical device makers, teamed up to diversify their offerings and scale.

Healthcare companies have participated in $103 billion worth of deals in 2022, down 45% year-over-year, as a result of high market volatility and increasing uncertainty due to macroeconomic factors.

If closed, the deal would create a medical device giant in the industry.

Dexcom and Insulet already have a partnership through which Insulet’s delivery system integrates into Dexcom’s glucose monitor, allowing the insulin to be automatically dispensed into patients’ bodies.

The deal would provide Dexcom with a closed-loop system through which it could offer diabetes patients both diagnosis and treatment services.

Stifel analyst Mathew Blackman believes the market “is likely going to need time to digest the longer-term value creation potential of this “rumored” combination and is more likely to focus, near-term, on the specter of a meaningful equity and/or debt raise needed to fund this deal.”

The analyst adds that the timing is “odd” amid the just-announced CEO departure. Blackman also offered his thoughts on the valuation.

“From a purely business model standpoint, PODD’s recurring revenue model matches well with DXCM’s business model and both have similar GM profiles (68.6%/ PODD: 68.4% in 2021). Still, even at the current depressed PODD $14B valuation, DXCM would have to raise a significant amount of capital ($2.7B of cash on the DXCM balance sheet) in a highly uncertain capital market backdrop,” the analyst said in a client note.

The Bloomberg report sent Insulent shares up 10% in pre-market trading Tuesday. Dexcom shares are down over 7% on the other hand.

Dexcom Reportedly in Talks to Acquire Insulet, Analyst Cautious
 

Related Articles

SAS and its pilots extend wage talks until Monday
SAS and its pilots extend wage talks until Monday By Reuters - Jul 02, 2022 1

STOCKHOLM (Reuters) -Scandinavian airline SAS and its pilots have agreed to extend their wage talks until Monday in the hope of averting a strike, a company executive told...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email