A Medical Device Daily
Inverness Medical Innovations (IMI; Waltham, Massachusetts) rolled on with its acquisitive ways last week, purchasing all of the capital stock of Redwood Toxicology Laboratory (Santa Rosa, California), a private drugs-of-abuse testing company, for $99 million in cash.
Redwood distributes rapid drugs-of-abuse diagnostic products used in the workplace, criminal justice and other testing markets, and operates a toxicology laboratory used for drugs-of-abuse testing and confirmation. Redwood’s 2007 revenues for the 12 months ended Sept. 30 were about $44 million; it is operating profitably.
Redwood was a portfolio company of American Capital Strategies.
Ron Zwanziger, CEO of IMI, said, “The drugs-of-abuse testing market has exhibited rapid rates of growth, and we believe this area continues to have strong potential. In addition, the availability of a confirmation testing service will further help in the growth of the FirstCheck home drug testing business which we acquired earlier this year.”
Robert Mount, CEO of Redwood said that it is company has been a partner of Inverness “for quite some time. Our solid relationship and shared vision for the future make this a positive step for both companies.”
Innovacon,an IMI subsidiary, manufactures virtually all of the products sold by Redwood. IMI said it plans to integrate certain of its existing drugs-of-abuse functions with those of Redwood and will to maintain existing relationships with its other distributors in this area.
Redwood describes itself as one of the nation’s premier forensic drug testing facilities.
American Capital and its affiliates invest from $5 million to $800 million per company in North America and EUR 5 million to 500 million per company in Europe.
In other dealmaking news:
• LeMaitre Vascular (Burlington, Massachusetts), a provider of peripheral vascular devices and implants, reported acquiring all the stock of Biomateriali S.r.l. (Milan, Italy), a privately held vascular graft manufacturer, for €1.8 million in cash, the assumption of €1.5 million to more than €2 million in liabilities.
Biomateriali manufactures straight and bifurcated polyester arterial prostheses. Polyester vascular grafts are used in a variety of arterial replacement and repair surgeries, predominantly open abdominal aortic aneurysm repair, manufacturing these prostheses under the Albograft brand for over 10 years.
Biomateriali’s Albograft implants are CE-marked and distributed by Edwards Lifesciences (Irvine, California) in Europe and in select international markets. Biomateriali also supplies straight polyester conduit grafts for cardiovascular surgery on an OEM basis to the Sorin Group (Milan).
Biomateriali has 30 employees in a 15,000 square foot manufacturing facility in Brindisi, Italy. Its revenues were about €2.1 million in the last 12 months.
“The polyester vascular graft market continues to represent one of the larger markets in vascular surgery,” said David Roberts, president of LeMaitre. “LeMaitre Vascular can now offer implants for both endovascular and open aortic repair.”
“Biomateriali’s high quality vascular grafts fit well in our product range and will leverage our growing European sales force,” said George LeMaitre, CEO and chairman of LeMaitre. “We recently announced plans to sell our products directly to Italian hospitals starting in January 2008. The Biomateriali acquisition should complement this direct-in-Italy initiative.”
LeMaitre said that the acquisition will be dilutive in 2008 and does not change its previous 2007 guidance of $40.5 million to $41.3 million.
In other dealmaking:
• Herman Miller (Zeeland, Michigan) said it has agreed to acquire Brandrud Furniture (Seattle), a healthcare furnishings manufacturer. Deal terms were not disclosed
Brandrud’s emphasis is on making seating products for patient rooms, patient treatment areas and public spaces such as lobbies and waiting areas, and it also serves the higher education and office markets. The company is expected to have 2007 sales of about $20 million.
Herman Miller said that it has had a “successful marketing alliance” with Brandrud since 2005.
The transaction is expected to be completed in February, pending the conclusion of due diligence.
“This acquisition supports Herman Miller’s strategy of accelerating investment in high-return growth initiatives,” said Brian Walker, CEO of Herman Miller. “Brandrud has been increasingly recognized for its high quality and well-designed products ... . The acquisition enables Herman Miller to gain access to a proven product portfolio that strengthens and expands our healthcare offering.”
• Pediatrix Medical Group (Fort Lauderdale, Florida) reported completing the acquisition of Northwest Newborn & Pediatric Services (Seattle), a neonatal physician group practice that provides patient care at two Seattle-area hospitals.
Eric Leung, MD, one of the partners of Northwest Newborn, will serve as Pediatrix’s corporate medical director for the practice.
Pediatrix said that it used an undisclosed amount of cash for acquisition of Northwest Newborn, and the practice is expected to contribute to Pediatrix’s earnings.
During 2007, Pediatrix said it has used its cash to complete 10 physician group practice acquisitions.
Pediatrix bills itself as the nation's leading provider of neonatal, maternal-fetal and pediatric physician subspecialty services and recently expanded to include anesthesiology services.