Tecomet Makes $450 Million Ortho Acquisition

Executives at Symmetry Medical apparently decided the recent wave of medtech acquisitions could cut into the market for the company's OEM Solutions unit. So they agreed to sell it for $450 million to orthopedic implant company Tecomet Inc.The acquisition will expand Tecomet's manufacturing capabilities and its global market, Tecomet CEO Bill Dow said in a news release. Backed by private equity firm Genstar Capital, which acquired it in December, Tecomet (Wilmington, MA) manufactures orthopedic implants, precision surgical instruments, trauma plates and photochemical etched products for medical device customers. OEM Solutions (Warsaw, IN) manufactures high-precision surgical instruments, orthopedic implants, and plastic and metal sterilization cases and trays. OEM Solutions has more than 450 customers, nearly 2,300 employees and 13 facilities in the U.S., U.K., Ireland, France, and Malaysia.OEM Solutions provided most of Symmetry Medical's second-quarter revenues of $80.9 million, reported today, up 5% from the same period a year ago. Implants contributed $29.4 million to that total, while instruments added $28.1 million and cases, $17.3 million.The remainder of Symmetry Medical, known as Symmetry Surgical, will become a new, publicly traded company after the transaction is completed in the fourth quarter. Symmetry Medical shareholders will receive one share in the new company for every four shares of Symmetry Medical.After the transaction is complete, Symmetry Surgical will be able to pursue a broader surgical instrument market without the financial limitations associated with Symmetry's current capital structure or potential conflicts with OEM customers, according to the company.

Much larger acquisitions have marked the medtech market in 2014. Medtronic agreed to acquire Irish medtech company Covidien in June for $43 billion.Not everyone is on board, however. The M&A climate has other companies, including HR Bard, watching closely from the sidelines. Smith & Nephew's CEO Olivier Bohuon told the Telegraph he wants no part of a mega-merger.

Nancy Crotti is a contributor to Qmed and MPMN.

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