Gaymar set to close, cutting 160 jobs (BuffaloNews.com)
Maker of medical devices, founded in 1956, will shutter Orchard Park and West Seneca operations after buyout by Stryker Corp. last year
Gaymar Industries’ Orchard Park and West Seneca operations will close by the end of next year, eliminating 160 jobs, victims of cost-cutting measures by its new parent company.
Gaymar, a maker of medical devices, was acquired by Stryker Corp. last year for $150 million in an all-cash deal. Michigan-based Stryker, a Fortune 500 medical technology giant, recorded sales of $7.3 billion in 2010.
Stryker will shut down Gaymar’s production lines and relocate its equipment to other sites in phases next year, said Tamara Cutler, a spokeswoman for the parent company. Gaymar’s layoffs will also occur in phases; when those layoffs will begin has not been announced.
While the Orchard Park and West Seneca locations will close, a Gaymar facility in Puerto Rico is “not impacted at this time,” Stryker said.
Gaymar was founded in 1956 and makes products that treat pressure ulcers and manage body temperature. At the time of 2010 deal, Stryker’s chairman, president and chief executive officer, Stephen P. MacMillan, described acquiring Gaymar as “consistent with our strategic goal of expanding our existing product offering and extensive sales force presence via innovative and value-added products.”
Gaymar’s CEO at the time of the acquisition said he did not expect any changes in the local operations, but he acknowledged Stryker could decide on “different strategies they want to employ over time” as the new owner became more familiar with the operations.
Last month, Stryker announced its plans to cut its global work force by about 5 percent and other restructuring moves aimed at reducing its annual pretax operating costs by more than $100 million, starting in 2013.
“As our markets continue to evolve, these actions are part of our ongoing focus on quality, innovation and cost, and position the company to continue to provide strong, consistent growth in a changing environment,” MacMillan said in a statement. “Against this backdrop, we are committed to achieving consistent double-digit per share earnings growth in 2011 and beyond.”
Stryker, which recorded net income of $1.3 billion in 2010, said it is preparing for a medical device excise tax that will go into effect in 2013, and wants to allow for “continued investment in strategic areas and drive growth” in its business, despite the current economy and a slowdown in elective procedures.
Stryker said it would move Gaymar’s equipment to other Stryker sites and supply chain partners, but did not specify where.
Gaymar had a strong business relationship with Stryker even before the acquisition last year. About $14 million of Gaymar’s $77 million in sales in 2009 were related to its Stryker relationship.
Gaymar had undergone two previous ownership changes prior to the acquisition by Stryker.
In 2000, Cortec Group, a New York City-based private equity firm, acquired Gaymar from the Whitney family, after Gaymar co-founder and chairman John K. Whitney died in a 1998 plane crash.
In 2003, Nautic Partners, based in Rhode Island, and Norwest Equity Partners, based in Minnesota, acquired the business from Cortec.