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Posts Categorized / Acquisition

  • Dec 09 / 2015
  • Comments Off on Manning Deal Alert: Technimark acquires Ci Medical
Acquisition, Deal Brief, Market Letters, Medical Device

Manning Deal Alert: Technimark acquires Ci Medical

Technimark LLC has acquired Ci Medical, formerly Classic Industries, as Technimark moves into the medical device supply chain.

Key points:

· Ci Medical offers Technimark a vertically integrated, plastics based medical contract manufacturer with services ranging from device design through molding and fulfillment

· Technimark gains plants in the United States, Mexico, Puerto Rico, and the United Kingdom

· This is a deal between private equity companies. Alteris, a longtime investor in CI Medical, is selling to the Pritzker Group, an established investor in the manufacturing companies

Terms of the transaction were not announced. The transaction indicates that there is still significant interest among diversified precision manufacturers in entering the medical supply chain. Manning Advisors will be releasing its study of the value and risk of diversification and specialization of the precision manufacturing fields in the next few weeks.

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  • Aug 28 / 2015
  • Comments Off on Greatbatch to Acquire Lake Region Medical for $1.73 Billion
Acquisition, Deal Brief, In the News, Medical Device

Greatbatch to Acquire Lake Region Medical for $1.73 Billion

GBgraphic

Greatbatch (NYSE:GB) announced it will acquire Lake Region Medical for $1,73 billion, creating the world’s largest medical device contract manufacturer with sales of over $1.5 billion. The transaction, scheduled to close in the fourth quarter, breaks down between cash, stock, and debt assumption. Specifically:

  • Lake Region shareholders will receive $478 million in cash
  • Additionally, Greatbatch will issue 5.1 million shares of stock, giving the Lake Region shareholders approximately 17% of the combined entity
  • Greatbatch will assume approximately $1 billion in Lake Region debt

The deal was estimated by industry watchers to have been done at 11.6X adjusted EBITDA.

The acquisition of Lake Region (which includes the former Accellent) by Greatbatch will prove a turning point in the evolution of the medical supply chain. The combination of two industry leaders in CV, neuro, MIS, and arguably ortho to form the first billion dollar plus contract manufacturer of its kind reflects the twin trends of OEM and supplier consolidation. While smaller contract manufacturers can thrive as specialists or by offering superior performance, it may be time for larger CMs to review strategy in light of this deal.

For more information on medical supply chain trends or to exchange views please contact Richard W. Sager at (585) 315-8413 or at rsager@manningadvisors.com.

Read more information on the transaction here.

  • Apr 09 / 2015
  • Comments Off on Deal Alert: Elos to acquire Onyx Medical
Acquisition, Deal Brief

Deal Alert: Elos to acquire Onyx Medical

Elos, the Swedish medical contract manufacturer, has announced the acquisition of Onyx Medical, an orthopedic supply chain manufacturer in Memphis, Tennessee. Key points:
 

  • Elos, a US$47 million company, is making its first major US acquisition
  • Onyx Medical specializes in trauma and extremity products. 2014 sales are reported at $16 million
  • Elos stated that it views Onyx as a platform acquisition

 
The transaction demonstrates the continued interest of European medtech companies in gaining US market share.
 
More information

  • Mar 09 / 2015
  • Comments Off on Alcoa to acquire RTI Metals, Inc.
Acquisition, Deal Brief, Metals

Alcoa to acquire RTI Metals, Inc.

Alcoa (NYSE:AA) announced today that it would acquire RTI International Metals, Inc. (NYSE:RTI) for $1.5 billion in an all-stock transaction coupled with assumption of debt. Key points:

  • The deal puts a 36% premium on RTI stock over last Friday’s close.
  • RTI’s most recent numbers put it at $794 million in revenues (ttm) and $115 million in EBITDA (source: CapitalIQ)
  • Alcoa’s primary interest is RTI’s titanium operations which will bolster Alcoa’s rapidly growing aerospace business

Alcoa expands its position in aerospace but what about Remmele?

RTI is a logical acquisition for Alcoa as it expands its specialty metals focus. A question for those in the medical supply chain is whether Alcoa will keep Remmele, RTI’s medical machining business in Minnesota.

To discuss this transaction and other trends in the medical supply chain please contact Richard W. Sager at Manning Advisors at rsager@manningadvisors.com or at (585) 315-8413 directly.

Read more on the transaction here.

As always, I look forward to your questions and comments.

  • Sep 17 / 2014
  • Comments Off on LSA Laser Acquired by AdvancedCath
Acquisition, Deal Brief

LSA Laser Acquired by AdvancedCath

AdvancedCath announced today the acquisition of LSA Laser of Plymouth, MN. LSA is a laser manufacturing specialist specializing in medical components and assemblies. LSA is unusual in laser space for its ability to work both medical metals and plastics.

Financial information regarding the transaction was not released.

Analysis

AdvancedCath is a rollup contract manufacturer focused on interventional products. Formed from TechDevice, AdvancedCath Technologies, MP&E, and now LSA, the company brings significant material, molding, balloon, guidewire, and device assembly expertise to this rapidly growing area of medicine. The AdvancedCath strategy of concentrating on certain high-value devices is challenging to execute but, when successful, leads to among the highest multiples in transaction value.

I look forward to your questions and comments via email, or directly at (585) 315-8413.

  • Aug 05 / 2014
  • Comments Off on Cadence Acquires Business Units From Plainfield Precision
Acquisition, Deal Brief

Cadence Acquires Business Units From Plainfield Precision

Cadence, Inc. announced today it has acquired three business units from Plainfield Precision. The units, located in Wisconsin, Massachusetts, and the Dominican Republic, add metal stamping and injection molding to Cadence’s portfolio of capabilities.

Financial information regarding the transaction was not released. Prior to the transaction Cadence announced revenues of $33.6 million for the first half of 2014.

Analysis

Cadence is known for carefully considered strategies. This acquisition continues their approach of expanding capabilities incrementally as a means of being a more strategic supplier to key customers. The Cadence website is located at www.cadenceinc.com.

I look forward to your questions and comments at rsager@manningadvisors.com or directly at (585) 315-8413.
  • Aug 04 / 2014
  • Comments Off on Tecomet to acquire Symmetry Medical’s OEM Solutions Business
Acquisition, Deal Brief, Market Letters

Tecomet to acquire Symmetry Medical’s OEM Solutions Business

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

 $316,196

Operating Income 2

 $29,025

Estimated EBITDA 2

 $42,325

Est. EBITDA Multiple on $450 million transaction

 10.6X

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.
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