Johnson & Johnson is buying privately held surgical robotics company Auris Health for about $3.4 billion in cash.
The healthcare conglomerate said on Wednesday that the agreement includes additional payments by J&J of $2.35 billion, contingent upon Auris reaching certain milestones.
Auris Health, a CNBC Disruptor 50 in 2018, raised an additional $220 million in funding – led by Partner Fund Management with new investors such as Wellington Management, D1 Capital Partners and Senator Investment Group and existing investors including Mithril Capital, Lux Capital and Viking Global Investors.
Jing Bing Zhang, research director, Worldwide Robotics at IDC, said: “Industrial robotics continues to top the technology investment priorities of manufacturing organizations across all major markets surveyed by IDC in 2018.”
Redwood City, CA-based Auris Health is a developer of robotic technologies focused on lung cancer. The deal follows J&J’s acquisition last year of Orthotaxy, a privately held developer of software-enabled surgery technologies.
“This acquisition will accelerate Johnson & Johnson’s entry into robotics with potential for growth and expansion into other interventional applications,” J&J said in a statement.
Arlington Capital Partners, a Washington, DC-based private equity firm, earlier said it agreed to sell Endeavor Robotics to FLIR Systems for $385 million. Endeavor Robotics, formerly known as iRobot Defense & Security, is headquartered in Chelmsford, Massachusetts and has delivered over 7,000 systems to customers in over 55 countries.
Research firm IDC forecasts worldwide spending on robotics systems and drones will grow at 17.6 percent to $115.7 billion in 2019 and $210.3 billion by 2022 with a compound annual growth rate (CAGR) of 20.2 percent.
Robotics spending forecast to be $103.4 billion in 2019. Investments in drones will total $12.3 billion in 2019 but are forecast to grow at 30.6 percent CAGR than robotics systems that will achieve 18.9 percent CAGR.
Robotics spending in 2019 will be dominated by hardware purchases, with nearly two thirds of all spending going toward robotic systems, after-market robotics hardware, and system hardware. Purchases of industrial robots and service robots will deliver nearly 30 percent of the category total in 2019.
Discrete manufacturing will be responsible for nearly half of all robotics systems spending worldwide in 2019, generating $50.2 billion in revenues. Process manufacturing, resource industries, healthcare, and consumers will be the next largest industries for robotics systems.