In its sixth acquisition of 2007, Greatbatch (Clarence, New York) has signed a definitive agreement to acquire Switzerland’s Precimed (Orvin) for about $125 million, moving the company into the $20 billion orthopedics market.
“We’ve done a nice job of growing revenue and income organically and it’s only within the past year that we have started to supplement that growth through acquisitions,” said Greatbatch president/CEO Thomas Hook in a presentation at the Piper Jaffray Healthcare Conference in New York yesterday.
The aggressive acquisition strategy has laid the groundwork for a substantial increase in Greatbatch’s 2008 sales forecasts. The U.S. maker of batteries and other components for devices, forecasts sales will be up from less than $300 million in 2006 to a projected range of $500 million-$550 million in 2008. The two newest segments — orthopedics and therapy delivery — will comprise half of that amount. Sales from its original CRM and neurostimulation business are estimated to remain relatively flat.
Greatbatch has mainly focused on the cardiovascular sector, but Hook said that the “strategic imperatives of the company have not changed — we’ve merely expanded the vision of the company to new market verticals: therapy delivery and orthopedics.”
Precimed’s products include instrumentation for hip and knee replacement, trauma and spine
Greatbatch will acquire the shares of Precimed, along with the assets of a pending (undisclosed) Precimed acquisition, for about $125 million in cash, plus an additional earnings-based payments of up to roughly $10 million, based on 2008 earnings. The company will use cash on hand and availability under its revolving credit agreement to fund these transactions, it said.
Both transactions are expected to close in early 2008.
The company’s other ‘07 acquisitions include:
• Quan Emerteq (Blaine, Minnesota) was acquired for $55 million. The company produces single use medical device products for the vascular, cardiac rhythm management and neurostimulation markets. (Medical Device Daily, Oct. 31, 2007).
• Engineered Assemblies (Teterboro, New Jersey), which makes custom battery solutions and electronics integration focused on rechargeable battery systems, was purchased for $12.4 million (MMD, Nov. 7, 2007).
• IntelliSensing (Orchard Park, New York), a maker of wireless sensor solutions that measure temperature, pressure, flow and other critical data, was acquired for $3.9 million (MDD, Oct. 30, 2007).
• Enpath Medical (Plymouth, Minnesota), a developer of percutaneous delivery systems and stimulation leads technologies, was acquired for $102 million (MDD, June 13, 2007).
• Biomec (Cleveland, Ohio), which makes polymer coatings that mimic the surface of endothelial cells of blood vessels with potential use on several medical devices, including in-dwelling central venous catheters, cardiac pacing leads, and extra-corporeal blood pump circuits in bypass surgery, was purchased for $11.4 million (MDD, April 11, 2007),
In other dealmaking news:
• AltarumInstitute (Ann Arbor, Michigan) is the lead investor in a current round of financing, providing $500,000 of a $1 million total round to Cielo MedSolutions (Ann Arbor). Other investors in this round are the Michigan Pre-Seed Capital Fund — which reported a $250,000 investment this week — and Automation Alley, the Southeast Michigan economic development agency, whose $250,000 investment in Cielo was reported earlier this year.
The two companies have signed a multi-year, exclusive, teaming agreement to collaborate on government-funded projects that align with the research, technical and consulting strengths of the organizations.
Cielo Clinic, the company’s flagship application, helps primary care physicians with patient care by providing point-of-care prompts and reminders of services due. Altarum is a non-profit research institute focused on helping government clients research and apply health systems solutions to improve the nation’s health.
• Dynamic Physical Therapy & Aquatic Rehabilitation Centers (Wilmington, Delaware), a provider of physical and occupational therapy, reported it has merged with Progress Physical Therapy (Philadelphia). The deal expands Dynamic’s service platform by adding four outpatient physical therapy clinics in and around Philadelphia.
Lake Capital first invested in Dynamic in April of 2006 and provided additional capital to fund this transaction.
Progress will continue to operate under its current name, with leadership from its existing management.
• Luminex (Austin, Texas) and Mayo Clinic (Rochester, Minnesota) reported a licensing agreement that enables Mayo to provide genetic and other testing services to patients using Luminex’s xMAP technology. The agreement contains collaboration and licensing provisions for the inherited disorder thalassemia and opportunities for additional test content creation. Financial terms were not disclosed.
Mayo will enhance its current genetic testing services for thalassemia to include a new molecular diagnostic test based on Multiplex Ligation-dependent Probe Amplification and bead-based liquid micro-array technology using xMAP technology from Luminex.