Jabil Circuit Inc. will keep the Nypro name in the health care space, citing the company’s experience and well-known brand.
In a deal that was announced in February and closed July 1, Jabil bought Clinton, Mass.-based Nypro Inc. for $665 million. Jabil, which is publicly traded, bought Nypro from about 2,000 employees who were members of the plastic processor’s Employee Stock Ownership Plan. In total, Nypro had approximately 10,000 employees around the world.
Jabil executives discussed the acquisition and how the companies are being integrated during an Oct. 30 investor conference in Boston, which also was broadcast online.
Jabil CEO Mark Mondello said his company, which has specialized in consumer electronics, is looking to diversify.
“We are out there looking at a lot of opportunities beyond electronics,” he said.
Historically, Jabil has not been very aggressive in the acquisition market, because company leaders want deals to make fiscal sense and cultural sense as well, the CEO told the audience. Nypro fit that criteria, he said.
Approximately 65-70 percent of Nypro’s revenue came from the health care and packaging markets, with the rest coming from its consumer electronics business. The latter business was integrated into Jabil’s current business, while the other two markets will continue to “fly under the Nypro flag,” Mondello said.
Jabil has been in the health care market for 10 years, while Nypro has more than four decades in the industry.
“We have a company that has a rich, rich company history,” said Courtney Ryan, who has been tapped to lead Nypro, which will continued to be managed out of Clinton, Mass. “There was a high risk of eroding value if we extinguished the brand.”
Officially the division will be branded as Nypro, a Jabil Co.
Among unit’s offerings are drug delivery devices for insulin and inhalers for asthma patients.
Ryan said Nypro has some really great systems, which now have been adopted at Jabil.
“Sometimes the acquiring company is guilty of drinking their own Kool-Aid, and that’s not always a good thing,” he said.
While growth has been slow for Jabil in the health care market, Ryan said he expects the annual growth rate to be high single digits to 10 percent.