Updated — Two months after being acquired by a new private equity owner, MedPlast Inc. is on the acquisition trail, buying Vention Medical's device manufacturing business. Meanwhile, Nordson Corp. is buying Vention's advanced technologies business.
MedPlast, a Tempe, Ariz.-based injection molder and contract manufacturer announced Feb. 20 that it has signed a deal to buy Vention Medical's device manufacturing services business. The deal will more than double MedPlast's size. Terms were not disclosed.
Meanwhile, Nordson Corp. has signed a deal to buy Vention's Advanced Technologies business. That business, which is based in Salem, N.H., designs and makes minimally invasive interventional delivery devices, catheters and advanced components for the global medical technology market.
Westlake, Ohio-based Nordson, which is publicly traded, said it is paying $705 million for that portion of Vention, in an all-cash deal. Nordson paid a multiple of 14.7 times earnings before interest, taxes, depreciation and amortization, which CFO Greg Thaxton described as being in line with high quality medical properties during a quarterly conference call Feb. 21.
The Vention AT business reported sales of $150 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $48 million for the 12 months ended Jan. 31.
Nordson President and CEO Michael Hilton said the deal enhances his company's capabilities in extrusion and complex medical tubing and balloon manufacturing, nitinol forming and other specialty material expertise. Company officials see Vention AT as an ideal complement to the current offering of single-use fluid management components, biomaterial delivery devices, and high end cannula and tubing, he added, noting the two businesses share many leading medical OEMs as customers.
“We feel like we're getting a lot of capability with this acquisition, particularly with the minimally invasive space, which is probably the highest growth space within the medical device marketplace so we like that,” Hilton told investment analysts during the conference call.
He called the deal a “sizeable scale play” for Nordson with good organic growth opportunity for the life sciences platform.
“It puts us well on the way to getting this business to something down the road that could be a half a billion-dollar business for us,” Hilton said.
Vention AT employs 775 and will operate as part of Nordson's Advanced Technology Systems segment.
MedPlast officials are also high on how their own deal with Vention will add to their medical manufacturing capabilities, world-wide presence and customer relationships.
“It's a great strategic fit,” MedPlast spokeswoman Kelly Zitlow said in a telephone interview Feb. 22. “It expands MedPlast's capabilities in both assembly and packaging. That's an important step for MedPlast in achieving its goal of being that provider that offers a comprehensive suite of services. It also expands Medplast's global footprint. It adds 11 more facilities in North and Central America, Asia and Europe.”
“The other nice thing about MedPlast and the Vention medical business coming together is that they share many of the same customers. It's very complimentary and helps the organization deepen those relationships.”
The acquisition strengthens MedPlast's leadership position in the medical device manufacturing industry, according to MedPlast CEO Harold Faig.
“This is something our customers have been asking for, and we are committed to continuing to expand our capabilities in areas that will bring value to our customers,” Faig said in a news release.
The company expects to close the deal in the second quarter. When it is complete, MedPlast will have 22 manufacturing facilities and employ more than 3,500 engineers, technicians and assembly workers specializing in producing surgical, orthopedic, diagnostic and other medical devices.
In December, Water Street Healthcare Partners, a strategic investment firm focused on health care, teamed up with the private equity firm JLL Partners to acquire from another private equity group, Baird Capital Partners, which formed the company in 2008.
Zitlow, who is also vice president of Water Street, said MedPlast will pursue more strategic acquisitions in the medical market.
“We're continuing dialogue with other providers in the industry and our plan is to continue to invest organically and pursue other strategic acquisitions like this one,” she said.