Genstar Capital subsidiary business, Tecomet Inc., precision contract manufacturer supporting the medical device and aerospace industries, has signed a definitive agreement with Symmetry Medical Inc. to acquire its OEM Solutions business segment for $450 million.
Headquartered in Warsaw, Indiana, OEM Solutions manufactures high precision surgical instruments, orthopedic implants, and plastic and metal sterilization cases and trays, selling its products to global medical device OEMs. OEM Solutions has over 450 customers, nearly 2,300 employees and 13 facilities in the U.S., the U.K., Ireland, France and Malaysia.
For its part, Symmetry is a developer and manufacturer of surgical instruments, orthopedic implants, and sterilization cases and trays It provides design, development and worldwide production capabilities for these products to customers in the orthopedic industry, other medical device markets, and specialized non-healthcare markets. Symmetry’s strategic rationale for offloading the OEM Solutions business is based on a combination of being a response to consolidation in the OEM/Contract Manufacturing device business, together with an opportunity to develop its core Symmetry business without the risk of crossover between that and the OEM solutions offering. Spurred on by increasing interest in orthopedics and recent activity in the contract manufacturing sector, Symmetry will now be able to pursue a broader surgical instrument market, fuelled by income from the transaction.
The Boards of Directors of both Symmetry Medical and Tecomet have approved the transaction, which Symmetry says will be in the form of a transfer to its shareholders of publicly traded stock in the new standalone Symmetry Surgical business that will not result in any corporate level tax to Symmetry Medical.
The transaction is expected to be completed in the fourth quarter and is subject to customary closing and regulatory approvals.
Bill Dow, Chief Executive Officer of Tecomet, said, “The combination of Tecomet and OEM Solutions creates a contract manufacturing enterprise that is capable of meeting the growing needs of our customers. OEM Solutions will not only extend the capabilities we offer but also our global reach. Our experienced and successful Tecomet team looks forward to working with OEM Solutions’ strong management crew and workforce to offer exceptional products, services and capabilities to the industries we serve.”
Thomas J. Sullivan, President and Chief Executive Officer of Symmetry Medical, stated, “We are excited to reach this agreement with Tecomet, which will recognize the value of the OEM Solutions business and enhance the growth potential of Symmetry Surgical. It also provides liquidity for our shareholders along with the upside potential of Symmetry Surgical as a well-positioned, standalone company focused on the large global market for surgical instruments.”
Source: Tecomet, Inc., PR Newswire