Tecomet and Symmetry Medical (NYSE:SMA) announced today that Tecomet will acquire Symmetry’s OEM Solutions Business for $450 million in an all cash transaction. OEM Solutions manufactures orthopedic implants, instruments, and cases and is based in Warsaw, Indiana.

The Numbers

Relying on Symmetry Medical’s published numbers for the last four reported quarters:

Symmetry Medical OEM Solutions

Q1 2013 through Q1 2014 ¹
($ thousands)

Revenues

Operating Income ²

Estimated EBITDA ²

Est. EBITDA Multiple on $450 million transaction

¹ Source: Symmetry Medical financial reports on file with Securities and Exchange Commission
² Includes adjustments for one-time and non-recurring events by Manning Advisors

Analysis

The big get bigger. Tecomet has been an acquirer in the recent past, buying Teleflex’s OEM orthopedics business in 2012. The combined entity looks to have consolidated revenues of over $400 million.

This transaction is another example of supply chain consolidation forming dominant players of over $100 revenue. It also illustrates the enhanced premiums consolidators will pay for dominant market/customer position.

For More Information

Please contact Richard W. Sager at Manning Advisors at rsager@manningadvisors.com or directly at (585) 315-8413.