Tecomet Buys Symmetry Medical's OEM Business For $450M
By Jof Enriquez,
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Medical device maker Tecomet Inc. is buying the original equipment manufacturing (OEM) segment of Symmetry Medical Inc. for $450M in cash, or $7.50 per share, minus fees and outstanding debt, the two companies announced recently.
“The combination of Tecomet and OEM Solutions creates a contract manufacturing enterprise that is capable of meeting the growing needs of our customers,” Bill Dow, CEO of Tecomet, said in a statement. “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.”
According to the statement, OEM Solutions manufactures surgical instruments, orthopedic implants, and sterilization equipment to medical device OEMs. The business has 450 customers, with 2,300 employees across 13 facilities located in the United States, the United Kingdom, France, Ireland, and Malaysia. In comparison, its buyer Tecomet is smaller in size. The Wilmington, Mass.-based company in 2012 had 455 employees, including 260 in Massachusetts, and $103M in revenue, according to data from the Boston Business Journal.
“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,” Thomas J. Sullivan, president and CEO of Symmetry Medical, said in a separate statement. “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.”
Upon separation and sale of OEM Solutions to Tecomet, Symmetry Medical will spin off its remaining surgical segment, Symmetry Surgical, which will become a newly traded public company in which existing shareholders will receive one share in exchange for four shares of Symmetry Medical stock, according to Symmetry’s statement.
The deal is expected to be completed by the end of 2014 after customary closing and regulatory approvals, listing of Symmetry Surgical’s common stock, and approval by shareholders, both companies stated in their statements.