Halyard Health Acquires Corpak MedSystems For $174 Million
By Jof Enriquez,
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Halyard Health has made its first acquisition as an independent healthcare company, buying Illinois-based Corpak MedSystems for $174 million in cash. The transaction, which is expected to close some time during the second quarter, pending antitrust and customary closing conditions, broadens Halyard's portfolio of enteral access devices.
Kimberly-Clark Corp. completed the tax-free spin-off of Halyard in October 2014 to allow Halyard to focus on healthcare — specifically, its surgical and infection-prevention products, as well as its medical device business. Halyard also manufactures supplies for respiratory health, pain management, intravenous therapy, and advanced wound care. Its purchase of Corpak helps expand its digestive health offerings, which include enteral placement kits and devices, percutaneous endoscopic gastrostomy (PEG) tubes, and related feeding tubes.
Corpak manufactures a full line of enteral nasoenteric, gastrostomy, jejunal tubes and accessories, endoscopic devices, and paracentesis kits and trays. It also makes the Cortral enteral access system, with real-time visualization technology for feeding tube access without X-ray, and the Lifenest sleep system for neonatal intensive care unit (NICU) patients. The company reported $54 million in sales for fiscal year 2015.
"We are excited to integrate Corpak's innovative products into our market-leading enteral feeding portfolio enabling us to serve our doctors and their patients more broadly," said Robert Abernathy, Halyard chairman and CEO, in a press release. "Corpak's business aligns well with our existing Medical Devices segment with slightly higher sales growth and similar gross margins. This first acquisition is an important step in achieving our strategic vision of transforming Halyard into a leading medical devices company, and positioning our business for future growth."
"Corpak achieved above-market growth through our focus on innovation, team and culture, and strategic realignment to become the 'Preferred Enteral Partner,'" said Frank McCaney, CEO of Corpak. "We believe that Corpak is well positioned for continued achievement and long-term success with Halyard, a company that understands our business, supports our goals and embraces our values."
Enteral feeding refers to the delivery of food and medications directly into the stomach, duodenum, or jejunum. According to Allied Market Research, the enteral feeding tube segment will continue to dominate the total enteral feeding devices market globally until 2020. Currently, demand for feeding tubes are strongest for neurological conditions, such as stroke, but cancer care is expected to take over the neurological application for these devices by the end of the decade. Home health applications will also drive growth.
Besides Halyard Health, other leading companies in this device segment include Medtronic, Fresenius, Boston Scientific, Nestlé, Danone, B. Braun, Moog, C. R. Bard, and CONMED Corporation.