Piper says M&A could be larger part of LivaNova story after settlement

Piper Jaffray analyst Matt O’Brien said LivaNova’s agreement to settle approximately 75% of the previously disclosed litigation in the U.S. related to its 3T heater-cooler device for up to $225M is in-line with expectations, though he now sees the question being how this payout affects the company’s clean balance sheet. Given the leverage of most Medtech peers, O’Brien thinks LivaNova has over $500M of “dry powder” for deals if it chooses. While he does not expect transformative change in 2019, M&A “could become a larger piece of the story” with this overhang mostly settled, the analyst tells investors. He keeps an Overweight rating and $120 price target on LivaNova shares.

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