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Cortec nears sale of maker of baby helmets for flat-head disorder

Cortec Group is close to exiting its more than five-year investment in Cranial Technologies, the maker of helmets that treat infants with flat-head syndrome, according to four sources.

The Tempe, Arizona, company generates roughly $12 million of EBITDA and $50 million of revenue, three sources said.

Another private equity group has been selected as the suitor and a deal is expected to be announced in the next few weeks, two sources said. The sources declined to identify the firm but the winning bidder is said to be a Chicago-based group, one person said.

Cain Brothers, a healthcare-focused investment firm, is providing financial advice to the sellers, three of the sources said.

Founded in 1986, Cranial treats infants suffering from plagiocephaly, or flat-head syndrome. The condition is characterized by a flat spot or misshapen head caused by “pressure from everyday surfaces, such as beds or car seats,” the website says. Nearly half of infants are affected, and experts recommend that one in 10 be evaluated for treatment, Cranial Tech says.

Its custom-made devices — the DOC Band — were the first cranial helmet cleared by the Food and Drug Administration for plagiocephaly treatment. The DOC Band redirects a baby’s natural growth into a normal head shape. The device has treated more than 100,000 babies with plagiocephaly, the website says.

Cranial Technologies has more than 30 clinics in the U.S., as well as licensed centers in Spain, France and Portugal.

Middle-market-focused Cortec purchased Cranial in December 2011 through its 2006 vintage fund, Cortec Fund IV. Terms weren’t disclosed.

Other sellers include private groups like Ballert Orthopedic, Becker Orthopedic, BioSculptor and Boston Brace, as well as publicly traded Hanger Inc.

Recent healthcare investments for New York’s Cortec include its December 2016 recap of ICON Eyecare and January 2016 investment in Center for Vein Restoration.

Cortec declined comment. Cain did not immediately return calls or emails.

Action Item: Reach Jeffrey Lipsitz, Cortec managing partner and Cranial board member, at

Photo courtesy Cranial Technologies