Steris Corporation is to acquire all the outstanding shares of privately-owned United States Endoscopy Group, Inc. With the acquisition Steris will significantly expand its presence in the gastrointestinal(GI) market and gain direct access to the procedural spaces in the GI market with a franchise of proprietary, single-use consumable medical devices.
Founded in 1991 and based in Mentor, Ohio, US Endoscopy designs, manufactures and sells therapeutic and diagnostic medical devices and support accessories used in GI endoscopy markets worldwide.
Steris will pay $270 million in an all cash transaction to acquire US Endoscopy. In calendar 2011, US Endoscopy generated revenue of approximately $70 million and operating income of approximately $14 million.
So why acquire US endoscopy? While Steris has a strong presence in what it calls the “procedural spaces” within the hospital, in particular the operating room, it has not historically had an equivalent presence in the GI environment. Consequently it sees this acquisition providing direct access to that multi-billion dollar global market, where US Endoscopy has focused on technology and innovation to build a pipeline of new products which propelled their revenue growth to greater than 15% compounded over the past five years.
“The addition of US Endoscopy to our current portfolio is a natural extension of our presence in the GI market,” said Walt Rosebrough, President and CEO of STERIS Corporation. “They have generated double-digit organic growth for many years through successful new product development, and the acquisition provides STERIS immediate scale with a direct sales force in the U. S. and a strong brand name. This acquisition is aligned with our strategy to expand in areas with attractive market dynamics that are adjacent to our current businesses. We are impressed with the strength of their management team and look forward to working with them to capture the opportunities ahead of us.”
for US Endoscopy
“We are absolutely delighted to have the opportunity to become part of STERIS, a company we respect and know well,” said Gulam Khan, President, CEO and Co-Chairman of US Endoscopy. “Not only will we gain the size and scale necessary to continue to innovate and grow over the long term, we will also ensure that we can and will remain a vital part of the Greater Cleveland community. While we have had great success the last two decades, having the support of STERIS will better enable us to take full advantage of global opportunities.”
Source: Steris Inc.