ConforMIS (CFMS) acquired the machining and polishing assets of Broad Peak Manufacturing for US $6.5MM (~$5.7 cash and ~$0.7 common stock). The transaction includes supplies and equipment, and CFMS will retain ~20 of the employees, leasing a manufacturing facility and office space in Wallingford, Connecticut.
Broad Peak had provided polishing services for iTotal® CR, iTotal® PS, iUni® and iDuo® femoral components since 2014. For 2Q17, CFMS noted a year-over-year decrease of -15.6% in sales of iTotal CR, iUni and iDuo; this integration could support a >50% reduction in polishing costs, starting in 1Q18.
The investment should also support launch of the FDA-cleared iTotal Hip, which has accelerated to 2H18 instead of 2019, as originally proposed.
Following the acquisition, Ed Kilgallen, former Managing Director at Broad Peak, is now CFMS' Vice President of Operations.
Other companies that have integrated their manufacturing include Globus Medical, Nexxt Spine and NuVasive.
Sources: ConforMIS, Inc.; ORTHOWORLD Inc.