New York-based private equity firm Cortec Group has acquired Cranial Technologies Inc. Terms of the deal were not released. Paul Hastings represented Cortec Group in the deal. Tempe, Arizona-based CranialTech is a developer, manufacturer and provider of medical devices and services for the treatment of positional plagiocephaly in infants.
(New York, NY) – Cortec Group, a New York based private equity firm which invests in middle-market healthcare, specialty manufacturing, service, and distribution businesses, announced that on December 23, 2011 its affiliate, Cortec Group Fund IV, L.P. (“Cortec Fund IV”), in partnership with management, acquired a majority interest in Cranial Technologies, Inc. (“CranialTech” or the “Company”). Terms of the transaction were not disclosed.
Based in Tempe, Arizona, CranialTech is a leading developer, manufacturer and provider of medical devices and services for the treatment of positional plagiocephaly (i.e., asymmetric head shape) in infants. The Company manufactures an FDA-cleared cranial remodeling device marketed under the DOC Band® brand name, and treats patients through a network of fourteen owned and four licensed treatment centers across the U.S. and Europe.
“Over its 20 year history, CranialTech has developed an industry-leading reputation among pediatricians, pediatric specialists and parents for its uncompromising commitment to quality and realizing positive clinical outcomes for each infant the Company treats. CranialTech’s leading market position is reflected in its strong brand name, which has allowed the Company to generate impressive historical growth and strong financial performance. We are excited to be partnering with CranialTech’s outstanding management team to accelerate the Company’s continued growth by expanding its sales and marketing efforts in existing markets and strategically entering new geographies”, stated Jeffrey A. Lipsitz, a Managing Partner at Cortec.
Jeanne Hertz, CranialTech’s Founder, who will continue to be involved with the Company, indicated she “chose Cortec because of their healthcare investing experience and strong-track record of helping founder-owned businesses achieve their next level of growth.” She further stated that “Cortec also shares CranialTech’s commitment to quality, service, and patient outcomes, which was extremely important to me and rest of the management team. The Company has a very bright future and we are excited to be partnering with Cortec.” Carol Erickson, CranialTech’s CEO, added, “We look forward to building on the growth our company has enjoyed over the last several years. Our entire management team is enthusiastic about the resources that Cortec brings to CranialTech to assist our expansion.”
The CranialTech acquisition represents Cortec Fund IV’s eighth platform investment and Cortec’s nineteenth healthcare investment since 2000. It also represents the final platform investment in Cortec Fund IV, a 2006 vintage fund with over $400 million in total committed capital.
About Cranial Technologies, Inc.
Founded in 1988, CranialTech is a leading developer, manufacturer and provider of medical devices and services for the treatment of positional plagiocephaly in infants. The Company’s mission is to provide a superior product, service, and the best possible outcome for every child with an abnormal head shape. Cranial is the only manufacturer of the DOC Band®, the first FDA-cleared device used for the treatment of positional plagiocephaly. The Company treats patients through a network of fourteen owned and four licensed treatment centers across the U.S. and Europe, and owns and operates a state-of-the-art manufacturing facility in Tempe, AZ where all of the Company’s bands are produced. CranialTech is the only band provider exclusively focused on treating positional plagiocephaly in infants and has invested in the development of a proprietary DSi® measurement system, which has significantly improved the overall patient experience, enhanced outcome documentation and streamlined the manufacturing process. The Company acquires new customers primarily from a diverse group of pediatricians and pediatric specialists that refer patients to CranialTech and consistently cite the Company as the highest quality plagiocephaly treatment provider in the industry. For additional information, please visit www.cranialtech.com.
Cortec acquires high value-added, middle-market healthcare, specialty manufacturing, service, and distribution businesses with leadership positions in their market niches and the desire to work with Cortec to drive growth and improve business fundamentals. Cortec currently manages over $1 billion in its two active funds and targets platform acquisitions with enterprise values of $30 million to $300 million and smaller follow-on acquisitions.