Globus Medical acquires local manufacturer for $53M
AUDUBON, Pa.–(BUSINESS WIRE)–Globus Medical, Inc. (NYSE: GMED), a leading musculoskeletal implant manufacturer, today announced that it has entered into an agreement to acquire Branch Medical Group, Inc. (“BMG”), a third party manufacturer of high precision medical devices. Under the terms of the agreement Globus has agreed to pay $52.9 million in cash, subject to certain closing adjustments, for BMG on a cash-free, debt-free basis.
“BMG has grown to be our top supplier by consistently producing our most complex parts in a highly efficient manner. The close working relationship we have enjoyed over the years has enabled us to work together to get products to the market quickly”
“We are very excited by the vertical integration opportunity afforded by BMG to strengthen Globus, both operationally and financially. BMG is an extremely efficient organization; driven by their ‘Right, On Time’ credo to produce high quality, precision medical devices,” said Dave Demski, President & COO of Globus. “The potential to expand the amount of products manufactured by BMG in the future represents a significant opportunity for Globus, and, at the acquisition price, is a compelling value.”
BMG, founded in 2005, today employs over 100 highly skilled people in their 50,000+ square-foot facility located in Audubon, PA. BMG’s sales for 2014 were $23.3 million, on which they earned $9.1 million in adjusted EBITDA (unaudited). Globus expects the acquisition to be neutral to its 2015 earnings as the benefit from the reduced costs of manufactured parts will be delayed as Globus’ current inventory levels are depleted and will be offset by expected investments to increase BMG’s manufacturing capacity.
“BMG has grown to be our top supplier by consistently producing our most complex parts in a highly efficient manner. The close working relationship we have enjoyed over the years has enabled us to work together to get products to the market quickly,” commented Andy Iott, Senior VP of Product Development of Globus. “The ability for enhanced collaboration between Globus engineers and BMG manufacturing professionals in the future is an added benefit to the transaction.”
The parties expect the closing of the acquisition to occur in March 2015 following satisfaction of the applicable closing conditions.
Globus will discuss this transaction during its previously announced quarterly earnings conference call today.
About Globus Medical, Inc.
Globus Medical, Inc. is a leading musculoskeletal implant company based in Audubon, PA. The company was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.