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Medical device outsource manufacturer Integer entered into an agreement to sell its Advanced Surgical and Orthopedics lines (ASO) to MedPlast, a global services provider to the medical device industry, for U.S. $600MM in cash. The transaction is expected to close in 3Q18.
Integer was formerly known as Greatbatch, which included Greatbatch Medical and Lake Region Medical orthopaedic products. In 2016, Greatbatch rebranded under the Integer name.
For 2017, Integer’s ASO plus Portable Medical reporting segment posted revenue of $439.8MM. Of that, ORTHOWORLD estimates that Integer’s 2017 orthopaedic revenue fell in a range between $190MM to $205MM. (Portable Medical is not included in the divestiture.) MedPlast is acquiring ~$400MM in sales and 10 manufacturing facilities.
The ASO business comprises products and services for markets of laparoscopy, general surgery, biopsy and drug delivery, arthroscopic devices/components and orthopaedics. The latter two in particular include shaver blades/burrs, ablation probes, suture anchors, joint recon implants, fracture plates/screws, spinal devices, instruments and delivery systems (cases and trays). Integer’s customers have included Cardinal Health, Johnson & Johnson, Medtronic, Philips Healthcare, Smith & Nephew, Stryker and Zimmer Biomet. In 2017, the ASO division was developing a portfolio of single-use instruments and coated products for orthopaedics, and instruments for the robotics end-market.
MedPlast gains a range of metals manufacturing capabilities (e.g. machining, stamping, coating and metal forming), as well as design, development and prototyping services. Its presence will expand in Europe, where MedPlast’s Orthoplastics division, based in the U.K., produces UHMWPE-based components for knee and hip devices. MedPlast acquired Orthoplastics in 2013.
In 2017, MedPlast acquired Vention Medical’s Device Manufacturing Services and Coastal Life Technologies to extend its portfolio of services into assembly and packaging. In 2016, MedPlast partnered with Water Street Healthcare Partners and JLL Partners, strategic investment firms specializing in the healthcare industry.
Prior to this announcement, ORTHOWORLD had placed Integer among the top five contract manufacturers serving the orthopaedic industry, ranked by revenue: Tecomet, Orchid, Cretex companies, Integer and Rosler.
Integer’s exit from orthopaedics marks the second major M&A transaction in the ortho-serving supplier space for 2018, following NN, Inc.’s purchase of Paragon Medical. Eight of the 15 M&A transactions tracked by ORTHOWORLD in 2018 have been on the supplier side.
