The US medical devices market size stood at $184.61 billion in 2022 and is projected to grow up to $192.78 billion this year, and to $291.04 billion by 2030, powered by a CAGR of 6.1 percent, according to Fortune Business Insights.
PE investors have been busy in this sector, buying and selling businesses that manufacture equipment for respiratory diseases, skin grafts, operations and procedures.
Here are seven deals announced this year, starting with the most recent deal announcement.
1. Kidd & Company sells NextPhase to Investindustrial-backed Arterex
NextPhase is a maker of complex electromechanical devices, active implantable devices and single use disposables for the North American market.
The company provides design and engineering, manufacturing and assembly, quality and regulatory, supply chain and logistics management services that enable its customers to bring low-to-medium volume complex medical devices to market, according to a press statement.
Arterex is a medical device contract manufacturer.
2. CORE-backed GEM buys Coining and PMP
GEM Manufacturing, a portfolio company of CORE Industrial Partners, in July announced the acquisition of Coining Manufacturing and Precision Machine Products Inc, a Clifton, New Jersey-based provider of specialty stamping and machining services.
“Coining and PMP offer differentiated, highly technical manufacturing capabilities and a long track record of working with customers in demanding, high-growth end markets to produce precision components for mission-critical applications,” said Matthew Puglisi, CORE partner.
3. Gemspring-backed Zavation acquires CoreLink
Zavation Medical Products, which is backed by Gemspring Capital, in June announced the acquisition of CoreLink, a St Louis, Missouri-based provider of spinal implant and instrumentation systems, from The Stephens Group.
CoreLink is a vertically integrated provider of spinal implant and instrumentation systems, focusing on novel devices and instrumentation for spinal surgery and a product portfolio supporting lateral spine procedures.
Based in Flowood, Mississippi, Zavation is a provider of spinal hardware and biologics.
4. Frazier-backed SunMed to acquire Avanos Medical’s respiratory health business
SunMed, a portfolio company of Seattle-based Frazier Healthcare Partners, in June agreed to acquire Avanos Medical’s respiratory health business, including the BALLARD, MICROCUFF and endOclear product lines. The deal is expected to close by late 2023.
Headquartered in Grand Rapids, Michigan, SunMed has manufacturing and distribution sites in the US, Mexico, China and Europe. Its product lines include a portfolio of consumable anesthesia and respiratory care products.
“Leveraging the expertise behind these successful brands, this transaction also supports our ability to drive growth and innovation, not just for the respiratory brands we are acquiring, but for our comprehensive breathing care platform,” said Hank Struik, CEO of SunMed.
Also in March, SunMed agreed to acquire a Vyaire business unit that makes and markets respiratory and anesthesia consumables focused on airway management and operative care.
5. Onex invests in Biomerics
ONCAP, the mid-market platform of Toronto-based private equity firm Onex, in May announced an investment in Biomerics, a Salt Lake City, Utah-based medical device contract manufacturer focused on micro-plastics, micro-metals, image-guided intervention, and final device assembly for interventional sectors.
As part of the deal, Biomerics will merge with the medical business of ONCAP portfolio company Precision Concepts, including Precision Concepts Group of Winston-Salem, North Carolina, which was acquired from the Marino family in April.
Precision Concepts is a manufacturer of finished medical devices and specialty rigid packaging solutions. ONCAP acquired the business in August 2018.
6. AEA to sell Spectrum Plastics Group to DuPont
AEA Investors, a New York based firm, has agreed to sell Spectrum Plastics Group, a Georgia-based medical device manufacturer, to DuPont. The deal is expected to close by the end of the third quarter of 2023.
“Spectrum is a best-in-class company for the development and advanced manufacturing of specialty medical devices and components,” said Rahul Goyal, a partner at AEA Investors, in a statement. “Through investments in the commercial and engineering organizations and expansion of its manufacturing operations, Spectrum has enhanced its capabilities and offerings in medical end markets and achieved significant growth and increased profitability.”
7. Ampersand Capital-backed Sterling acquires RBC Medical Innovations
Sterling Medical Devices, a portfolio company of Ampersand Capital Partners, has recapitalized and merged with Lenexa, Kansas-based medical device company RBC Medical Innovations.
Moonachie, New Jersey-based Sterling is a provider of design, development and regulatory services to the medical device industry.
As part of the transaction, David Montecalvo was appointed CEO of the combined company. Sterling founder Dan Sterling will remain on the senior leadership team and a board director. RBC founder Carl Mayer has joined the board of directors.
PE Hub expects to see a steady flow of deals in this sector.