Contract Manufacturer M&A: 2017-3Q18

by Julie A. Vetalice on October 19, 2018

Merger and acquisition activity is shaping the broader orthopaedic supply chain base, with contract manufacturers of all sizes transforming in the last decade to keep pace with their scaling device company customers. We’ve identified three M&A trends in this portion of the market—ones that we expect will continue.

Global Scale: Contract manufacturers have focused M&A efforts on geographic expansion to better serve customers globally. In recent years, we’ve watched ex-U.S. companies expand their presence in the U.S., while U.S. companies have purchased facilities in Europe and Asia.

New Capabilities: Contract manufacturers have purchased companies that will allow them to bring in-house new capabilities like additive and coatings or services like design, regulatory or logistics.

Outside Investors: Private equity firms have been behind much of the M&A activity in recent years. We expect new firms to enter this market by supplier acquisitions, and current firms to provide the capital to make additional purchases.

To give a sense of this activity, we’ve listed the contract manufacturer M&A that we’ve tracked from 2017 through 3Q18.

Acquirer	Acquired	Description
Arcamed	Veracity Medical	Arcamed, a supplier of case and tray systems, expands its capabilities to include contract manufacturing of instruments and implants.
ARCH Global Precision	Seabrook	Seabrook was acquired by ARCH Global Precision, a family of companies focused on manufacturing precision cutting tools, precision machined industrial components and medical implants and instruments.
Avalign Technologies	Millennium Surgical	Millennium is a manufacturer of difficult-to-find specialty surgical instruments for orthopaedics and neurosurgery.
Avalign Technologies	Thortex	This transaction brings Thortex’s capabilities of metal injection molding, precision manufacturing and porous coating solutions for titanium and cobalt-chrome orthopaedic implants.
Cretex Companies	Quality Tech Services	QTS is a supplier of outsourced packaging for the medical device industry.
Eurocoating	Nanosurfaces division of CoorsTek Medical	Nanosurfaces, the Italian manufacturing division of CoorsTek, was founded in 2013 as a spin-off of the manufacturing operations of SAMO, one of Europe’s longest-standing orthopaedic OEMs. The acquisition expands Eurocoating’s manufacturing operations and adds surface treatment capabilities.
Graham Partners (private equity firm)	Medbio	Medbio specializes in precision injection molding, instrument manufacturing, laser processing, packaging and component parts.
In’Tech Medical	Pyxidis	Manufacturer of customized metal and plastic sterilization cases and trays for surgical instruments.
In’Tech Medical	Bradshaw Medical	In’Tech bolsters its instrument portfolio and continues its global expansion with this acquisition. Bradshaw has over 40 issued patents for its spinal and orthopaedic instrument portfolio, and provides customizable silicone overmolded solutions.
Kohlberg & Co. (private equity firm)	Cadence	The acquisition broadens Cadence’s manufacturing capabilities. Kohlberg’s investments include Amendia, a spinal solutions provider that rebranded as Spinal Elements in 2017.
MedPlast	Integer’s Advanced Surgical & Orthopaedics	Following the purchase, MedPlast rebranded itself as Viant. With the Integer ASO product line acquisition, Viant gains a range of metals manufacturing capabilities (e.g. machining, stamping, coating and metal forming), as well as design, development and prototyping services.
MedPlast	Vention Medical’s device manufacturing assets	The acquisition broadens MedPlast’s manufacturing capabilities and bolsters its position as a leading services provider to the world’s largest original equipment manufacturers.
MinebeaMitsumi	C&A Tool	The acquisition expands Minebea’s presence in medical, additive manufacturing, precision machining and ball bearings.
MW Industries	LaVezzi Precision	LaVezzi Precision, an implant and instrument component manufacturer, joins the MW Medical Solutions brand. MW is a provider of springs, specialty fasteners, machined parts and other precision components.
NN	Bridgemedica	The acquisition expands NN’s new product design engineering and development capabilities.
NN	DRT Medical	DRT is a supplier of precision manufactured orthopaedic implants and instruments.
NN	Paragon Medical	The acquisition, for $375 MM in cash, positions NN as one of the 10 largest contract manufacturers in orthopaedics and supports NN’s strategy to grow its Life Science revenue to $300MM in 2018. Paragon, a Tier-1 manufacturer of implants, instruments, cases and trays, operates seven facilities located in Asia, Europe and the U.S.
Nordson	Vention Medical’s Advanced Technologies	Vention AT and Nordson Medical share several common customers. The kyphoplasty specialty is just one among Vention AT’s broad base of end markets, complementing Nordson’s orthobiologics delivery solution that includes the OsteoXpress Graft Delivery Device.
Oberg Medical	X-L Engineering	Oberg is a contract manufacturer of precision metal components, tooling and stamping assemblies. The acquisition provides new and expanded manufacturing capabilities for Oberg as well as additional resources in engineering, new product development and prototyping.
Röchling Advent Tool & Mold	Precision Medical Products	Röchling is a manufacturer of injection-molded plastic precision components. Precision Medical manufactures products that include syringes for bone cement. The acquisition supports Röchling’s growth strategy in the U.S.
Sussex Wire	Marox	Sussex Wire, a manufacturer of cold formed components for a variety of industries, acquired Marox, a manufacturer of orthopaedic implants and instruments.
Tecomet	HD Surgical	The acquisition bolsters Tecomet’s instrument manufacturing and expands its ability to support its mid-size customers.
TITAN Metal Fabricators	Edge International	TITAN acquired select assets of Edge International, distributor of raw materials used in the manufacture of implants and instruments for the orthopaedic, spine and trauma markets.
Wytech	Micro-Tube Fabricators	Micro-Tube specializes in precision fabricated tubular components for medical devices and other industrial markets. The combined entities, including recently-acquired Morton Bowen, will provide engineering, manufacturing, assembly and value-added services to medical device OEMs.

Update, 12/19/18: The original article noted a purchase price of Bradshaw Medical by In’Tech. The figure was removed due to inaccuracy. The transaction details were not made public.

Merger and acquisition activity is shaping the broader orthopaedic supply chain base, with contract manufacturers of all sizes transforming in the last decade to keep pace with their scaling device company customers. We've identified three M&A trends in this portion of the market—ones that we expect will continue.

Global Scale:...

To give a sense of this activity, we’ve listed the contract manufacturer M&A that we’ve tracked from 2017 through 3Q18.

Acquirer	Acquired	Description
Arcamed	Veracity Medical	Arcamed, a supplier of case and tray systems, expands its capabilities to include contract manufacturing of instruments and implants.
ARCH Global Precision	Seabrook	Seabrook was acquired by ARCH Global Precision, a family of companies focused on manufacturing precision cutting tools, precision machined industrial components and medical implants and instruments.
Avalign Technologies	Millennium Surgical	Millennium is a manufacturer of difficult-to-find specialty surgical instruments for orthopaedics and neurosurgery.
Avalign Technologies	Thortex	This transaction brings Thortex’s capabilities of metal injection molding, precision manufacturing and porous coating solutions for titanium and cobalt-chrome orthopaedic implants.
Cretex Companies	Quality Tech Services	QTS is a supplier of outsourced packaging for the medical device industry.
Eurocoating	Nanosurfaces division of CoorsTek Medical	Nanosurfaces, the Italian manufacturing division of CoorsTek, was founded in 2013 as a spin-off of the manufacturing operations of SAMO, one of Europe’s longest-standing orthopaedic OEMs. The acquisition expands Eurocoating’s manufacturing operations and adds surface treatment capabilities.
Graham Partners (private equity firm)	Medbio	Medbio specializes in precision injection molding, instrument manufacturing, laser processing, packaging and component parts.
In’Tech Medical	Pyxidis	Manufacturer of customized metal and plastic sterilization cases and trays for surgical instruments.
In’Tech Medical	Bradshaw Medical	In’Tech bolsters its instrument portfolio and continues its global expansion with this acquisition. Bradshaw has over 40 issued patents for its spinal and orthopaedic instrument portfolio, and provides customizable silicone overmolded solutions.
Kohlberg & Co. (private equity firm)	Cadence	The acquisition broadens Cadence’s manufacturing capabilities. Kohlberg’s investments include Amendia, a spinal solutions provider that rebranded as Spinal Elements in 2017.
MedPlast	Integer’s Advanced Surgical & Orthopaedics	Following the purchase, MedPlast rebranded itself as Viant. With the Integer ASO product line acquisition, Viant gains a range of metals manufacturing capabilities (e.g. machining, stamping, coating and metal forming), as well as design, development and prototyping services.
MedPlast	Vention Medical’s device manufacturing assets	The acquisition broadens MedPlast’s manufacturing capabilities and bolsters its position as a leading services provider to the world’s largest original equipment manufacturers.
MinebeaMitsumi	C&A Tool	The acquisition expands Minebea’s presence in medical, additive manufacturing, precision machining and ball bearings.
MW Industries	LaVezzi Precision	LaVezzi Precision, an implant and instrument component manufacturer, joins the MW Medical Solutions brand. MW is a provider of springs, specialty fasteners, machined parts and other precision components.
NN	Bridgemedica	The acquisition expands NN’s new product design engineering and development capabilities.
NN	DRT Medical	DRT is a supplier of precision manufactured orthopaedic implants and instruments.
NN	Paragon Medical	The acquisition, for $375 MM in cash, positions NN as one of the 10 largest contract manufacturers in orthopaedics and supports NN’s strategy to grow its Life Science revenue to $300MM in 2018. Paragon, a Tier-1 manufacturer of implants, instruments, cases and trays, operates seven facilities located in Asia, Europe and the U.S.
Nordson	Vention Medical’s Advanced Technologies	Vention AT and Nordson Medical share several common customers. The kyphoplasty specialty is just one among Vention AT’s broad base of end markets, complementing Nordson’s orthobiologics delivery solution that includes the OsteoXpress Graft Delivery Device.
Oberg Medical	X-L Engineering	Oberg is a contract manufacturer of precision metal components, tooling and stamping assemblies. The acquisition provides new and expanded manufacturing capabilities for Oberg as well as additional resources in engineering, new product development and prototyping.
Röchling Advent Tool & Mold	Precision Medical Products	Röchling is a manufacturer of injection-molded plastic precision components. Precision Medical manufactures products that include syringes for bone cement. The acquisition supports Röchling’s growth strategy in the U.S.
Sussex Wire	Marox	Sussex Wire, a manufacturer of cold formed components for a variety of industries, acquired Marox, a manufacturer of orthopaedic implants and instruments.
Tecomet	HD Surgical	The acquisition bolsters Tecomet’s instrument manufacturing and expands its ability to support its mid-size customers.
TITAN Metal Fabricators	Edge International	TITAN acquired select assets of Edge International, distributor of raw materials used in the manufacture of implants and instruments for the orthopaedic, spine and trauma markets.
Wytech	Micro-Tube Fabricators	Micro-Tube specializes in precision fabricated tubular components for medical devices and other industrial markets. The combined entities, including recently-acquired Morton Bowen, will provide engineering, manufacturing, assembly and value-added services to medical device OEMs.

Update, 12/19/18: The original article noted a purchase price of Bradshaw Medical by In’Tech. The figure was removed due to inaccuracy. The transaction details were not made public.