IRISH MEDICAL devices group Creganna has acquired US-headquartered Avalon Medical Sciences in a deal that it says will increase its revenues by 50 per cent.
The transaction will add 270 employees to the workforce of Creganna, which designs and manufactures specialist equipment for medical devices designed for minimally invasive surgical procedures and make it the largest indigenous player in the medical device sector. The Galway-based company already employs 550 people.
Avalon currently trades as Tactx Medical and the enlarged company will be known as Creganna Tactx Medical.
Creganna chief executive Helen Ryan described the acquisition as a “milestone” transaction, positioning Creganna Tactx Medical within the top 10 global providers of technologies and services to companies in the minimally invasive device business.
In a statement, Creganna said the acquisition would increase its global staff, manufacturing footprint and revenues by 50 per cent. It added that the combined group would have estimated revenues of $110 million in 2009.
Creganna became a privately held company in 2007 and does not disclose financial performance. Its last available results showed revenue of €31.5 million in 2006. On the basis of the company’s statement yesterday, that has risen by about two-thirds to just over €50 million last year.
Outsourced production is a growing feature of the medical devices sector, as the major industry players look to reduce costs. Industry analysts reckon that while the market for medical devices is growing at an annualised rate of 9 per cent, year-on-year growth in the $6 billion contract manufacturing and design market globally is closer to 15 per cent.
Ms Ryan described the two companies as complementary and said their union would help Creganna Tactx offer itself as a strategic partner to multinational medical device businesses.
Creganna has manufacturing operations in Galway and in Massachusetts. Tactx Medical manufactures at its Campbell, California headquarters and in Minneapolis and Singapore. Between them, they have a presence in the major clusters of medical device companies around the world.
Ms Ryan said the two companies tended to specialise in different elements of the specialist catheters and needles used in minimally invasive surgery. “This move represents a key step in Creganna’s vision to build a leading global medical technology company,” Ms Ryan said yesterday.
No price was disclosed. However, when Indian packaging giant Essel Propack announced it was putting its medical device business on the market last August, it was reported that the company was seeking in the region of €16 million. Essel initially acquired Avalon in March 2006 but decided to dispose of it as a non-core business when recession hit.
Creganna said it expected the initial stages of the group’s integration to be completed by the middle of February. The company was advised by Barclays Bank Ireland, HSBC Corporate Banking Ireland and Bank of Ireland.
