Recently formed PolyMedex Discovery Group has acquired the assets of medical tubing extruder Putnam Plastics Co. LLC.
PolyMedex which comprises custom compounder Foster Corp., Foster West Corp., PPC LLC Acquisition Corp. and now Putnam is a privately owned company with roughly $40 million in sales that will be based at Foster's headquarters in Putnam, Conn.
In the deal, completed Feb. 9, PolyMedex purchased the assets of Putnam for $25 million from its previous owner, Memry Corp., which is part of SAES Getters Group in Lainate, Italy, near Milan.
By combining forces, the two companies now have a single organization that can develop highly complex polymers, including nanocomposites, for technically demanding medical and pharmaceutical applications, as well as the ability to produce coextruded multilumen, multilayer and thin-walled tubing and catheters. Applications include respiratory, neurological and cardiovascular products, and minimally invasive surgical instruments.
This is a bold move to make when things don't look well in the economy, said Larry Acquarulo, chief executive officer of Foster, who will serve as co-chief executive officers of PolyMedex with Jim Dandeneau, CEO and founder of Putnam. Putnam was a private company until it was acquired by Memry four years ago.
But both companies have a pretty sound business model and both companies are financially strong, Acquarulo said in a Feb. 10 interview at Medical Design & Manufacturing West in Anaheim. This merger is good for the economy as well, and hopefully, it will send a message to others not to pull back all the way and not to be afraid to keep running their business. We are going to continue to do what we know how to do.
In its fiscal year ended June 30, Putnam had sales of $16 million and operating profit of $2.1 million. In its most recent quarter, ended Dec. 31, sales were $4.5 million with operating profit of $700,000. Foster had 2008 sales of $22 million.
PolyMedex will have 170-200 employees and three manufacturing facilities two in Connecticut and one in Las Vegas with about 110,000 square feet of space. The Connecticut plants are three miles apart in Putnam and Dayville, where Putnam Plastics is based.
The Dayville plant has roughly 40 extruders in sizes of one-half inch to 21/2 inches. Foster's 46,000-square- foot Putnam plant has a Class 100,000 clean room, and its 20,000-square-foot plant in Las Vegas has a Class 7 clean room for putting pharmaceuticals into polymers for drug-delivery devices. It also has a manufacturing cell for bioabsorbable compounds.
We will be able to get materials compounded and extruded expeditiously and turn around engineering development more quickly, Dandeneau said. We can control the process from compounding to processing to extrusion.
Acquarulo agreed. We could develop highly engineered compounds [at Foster], but I had difficulty in getting some new products out because we didn't have the capacity to do the extrusion. Major device companies had a lot of extrusion capacity, but were focused on their own development activities, so it was difficult to get a lot of our compounds developed into products.
Now, he said, PolyMedex will be able to develop compounds geared toward manufacturing and to prototype products for potential customers.
We will be at a further stage of development and take a lot of the design risk out for customers, said Acquarulo. They will be able to visualize the product rather than just look at a pellet. It will help us develop more highly developed compounds that are designed for manufacturability and for areas where Putnam has strengths.
In addition, Foster's delivery science unit which makes drug-delivery systems that incorporate an active pharmaceutical into a polymer will give PolyMedex leverage in the drug-delivery market where the line has been blurring between device manufacturers and pharmaceutical companies, Acquarulo said.
You are starting to see an integration of pharmaceutical companies with device companies, as pharmaceuticals are being delivered to the site in the body where medicine is required, he said.
The company also hopes to leverage its combined capabilities in a market where customers are increasingly looking for suppliers with greater depth and breadth of services.