Altor Equity’s Orchid Orthopedics approaches sale

  • Altor investment dates to June ’11
  • Orchid competes with Charlesbank-backed Tecomet
  • Sell-side adviser: Piper Jaffray

Swedish PE firm Altor Equity Partners is nearing the sale of Orchid Orthopedic Solutions, according to three sources.

Nordic Capital has emerged as the frontrunner to win the process for the Holt, Michigan, provider of outsourcing services in the orthopedic implants industry, one of the sources said.

The anticipated transaction would conclude a Piper Jaffray-conducted sales process, the sources said.

Orchid is anticipated to produce 2019 Ebitda around the mid-$80 million range, the sources said. A 12x to 13x multiple of Ebitda is likely, one of the people added. That suggests a deal could be valued upwards of $1 billion.

Altor on its website states that Orchid posted 2017 revenues of 273 million euros (~$310 million).

Formed in 2005 through the fusion of medical device suppliers, Orchid provides contract design and manufacturing services to orthopedic OEMs and other medical device end markets including dental and cardiovascular.

Led by CEO Jerry Jurkiewicz, Orchid encompasses 13 manufacturing sites in the U.S., U.K., Switzerland and China, Altor states on its website.

Orchid is a direct competitor of Wilmington, Massachusetts, Tecomet, a portfolio company of Charlesbank Capital Partners, sources said.

Charlesbank bought Tecomet for the second time in May 2017, purchasing the company from Genstar Capital. Genstar initially bought Tecomet from Charlesbank in 2013.

While Tecomet was considered a logical buyer of Orchid, sources said, its participation in the process is unclear.

Altor’s initial investment in Orchid dates to June 2011. The firm purchased Orchid through its third fund via a secondary buyout from Churchill Equity of Minneapolis.

Altor lists Claes Ekstrom, Jens Browaldh and Camilla Vachet as associated investment team members.

Nordic declined to comment, while representatives with Altor, Orchid and Piper Jaffray didn’t immediately return requests for comment.

Action Item: Reach Altor’s Stockholm office at +46 8 678 9100