CLEVELAND — MedPlast Inc., led by private equity-backed management has grown from combining two companies in 2008 to become a diverse medical processor, with injection molding, two-shot molding, blow molding, extrusion, silicone, compression molding and tooling, said CEO Harold Faig.
“We cover the broad range, and I feel that we have the broadest capability serving the largest segment of the health care market,” Faig said at Plastics in Medical Devices 2014 in Cleveland.
Based in Tempe, Ariz., MedPlast now runs 13 factories in the United States, Mexico, China and Europe. The company serves 10 different market segments, including diagnostic products, surgical aspirators, shunts, orthopedic implants and cardiovascular syringes.
Faig said the focus on medical is important: “Everything we do is about health care. We get up in the morning and we think about health care. We go to sleep at night, we think about health care.”
Building MedPlast was not easy, said Faig and Andrew Brickman, partner in Baird
Capital Partners, who relived the formation of the medical supplier May 8 at the conference, held in the new Cleveland Convention Center. Moderating the session was Andrew Petryk, managing director of Brown Gibbons Lang & Co., which represented the sellers when MedPlast bought part of Allied Tech Products Corp. and Orthoplastics Ltd.
“This deal will go down as the toughest transaction I’ve ever worked on,” Brickman said, “but it’s going to be fruitful.”
Baird Capital bought ATP’s engineered rubber and plastics group and K&W Medical Specialties, bringing together five plants. Baird compiled a management team, led by Faig, to run Medplast. Faig has decades of plastics experience, as CEO of Tech Group Inc. and before that, a longtime executive of machinery builder Milacron LLC. He had retired from both companies.
“We got in there thinking we’ll just go buy a medical company and call it a day, and scale it [up],” Brickman said. In 2008, the market was “frothy” and selling prices were high.
“We fought it out and formed MedPlast,” he said.
Then the Great Recession hit.
“It was very painful right out of the gate,” Brickman said.
Brickman called plastics “a tough business,” even in good times. And medical is one of most challenging markets, as customers want to remove costs and demand perfect quality from the molder.
Brickman and Faig said the immediate hard times proved the axiom that people are critical. Faig had brought over some key plastics people from Tech Group.
“I had a very loyal team of people,” he said. “We had a seasoned team, and that, in my mind, was the difference between winning and losing in 2008.”
Faig also said a plastics supplier must have employees with medical-sector experience and a disciplined corporate culture, since mistakes can carry very severe consequences — or even fatal ones.
The owners steadily invested in expansion and clean rooms. Then in 2012, MedPlast bought United Plastics Group Inc. That deal brought contract manufacturing and operations in China and Mexico. A year later, MedPlast bought U.K.-based Orthoplastics and its device implants expertise.
Faig said the result is a broad medical plastics company that is more of a one-stop shop than traditional medical molders. Having plants in different locations also is important, because health care customers would rather not travel to far-flung locations as they develop highly complex products, he said.
Looking ahead, Faig said single-use devices will continue to grow, and regulations are getting tighter. The Affordable Care Act is bringing millions of new health care consumers. And demand is increasing for medical devices for use at home, outside of the hospital.
Faig said MedPlast is getting into blow, fill and seal technology. The company also is looking at 3-D printing, although he did not give details.
“We’re very, very bullish on the medical markets,” Faig said.