By Suzanne Hodsden
Tecomet, a contract manufacturer of medical devices and surgical instruments, may be up for auction in the near future. Sources told Reuters that the company, currently owned by private equity firm Genstar Capital, could be valued at more than $1 billion.
Established in 1963, Tecomet specializes in precision metal processing that serves customers developing medical devices, including orthopedic reconstruction implants, cardiovascular implants, cranial maxillofacial implants, and trauma and extremity reconstruction implants. According to the company website, Tecomet was the first to develop powdered metal coatings for cardiovascular implants and the first to forge a zirconium femoral implant.
Through a series of acquisitions, Tecomet has expanded its portfolio of contract-manufactured medical instruments. In 2012, Tecomet acquired Teleflex Medical original equipment manufacturing (OEM) orthopedics business, which included the Beere Medical brand of custom instruments.
In 2014, the company purchased both 3D Medical Manufacturing and Symmetry Medical’s OEM Solutions business. Before its $450 million sale to Tecomet, Symmetry Medical expanded its product and service offerings through nine multimillion-dollar acquisitions over eight years, including DuPuy Orthopedics, Mettis (UK), and Codman and Shurtleff, according to a report published by P&M Corporate Finance.
Tecomet CEO Bill Dow remarked in a 2014 press release that the company’s goal was to offer the “broadest manufacturing capabilities along with innovative processes to control costs, provide high quality complex components and reduce lead times.”
Tecomet currently is the largest orthopedic contract manufacturer in the world, with manufacturing facilities located in five countries on three continents. Rob Rutledge, managing director for Genstar, commented in a press release last year that Tecomet looked forward to “future expansion” under the guidance of its new COO.
According to Reuters, Genstar has hired investment bank William Blair & Company to handle the auction of Tecomet, though all three organizations declined to comment. Genstar Capital acquired the company in 2013 from Charlesbank Capital Parnters, a buyout firm, for an undisclosed amount, but sources told Reuters that, in today’s market, Tecomet could be sold for more than $1 billion.
Reuters reported that recent efforts to cut costs and improve efficiency in medical device manufacturing have led to significant growth among contract manufacturers. A recent report by Visiongain projected that revenues for contract medical device manufacturing will reach $90.5 billion by 2020, a figure driven by an aging population and rapid growth in several emerging markets. The report lists Teocomet among the top ten leading companies in medical device contract manufacturing.