Contract Manufacturer M&A: 2017-3Q18

By Julie A. Vetalice

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.

Tags: M&A