DuPont to Acquire Spectrum Plastics Group
DuPont announced on May 2, 2023 its acquisition of Spectrum Plastics Group (“Spectrum”), a specialty plastics manufacturer, from the private equity firm AEA Investors for $1.75 billion.
Headquartered in Atlanta, GA, Spectrum was formed in 2017 via a merger of Pexco LLC and PPC Industries (including its Kelpac Medical subsidiary) as a portfolio company of the private equity firm Kohlberg & Company LLC. In 2018, AEA Investors’ Middle Market Private Equity team bought Spectrum from Kohlberg & Company, LLC. According to DuPont’s press release, Spectrum’s clients include 22 of the world’s 26 top medical device original equipment manufacturers (“OEM”). The industry served by these OEMs includes thriving medical sectors such as structural heart, electrophysiology, surgical robotics, and cardiovascular.
DuPont has a robust portfolio that already includes a medical device and biopharma consumables business and a healthcare packaging business, such as its Liveo™ silicone solutions business and Tyvek® Medical Packaging. Ed Breen, Executive Chairman and Chief Executive Officer of DuPont stated, when announcing the acquisition of Spectrum:
We have been focused on Spectrum for a long time and our team is extremely excited for this opportunity. Spectrum is a compelling strategic complement to our existing healthcare portfolio, which already includes businesses with best-in-class innovation, deep customer relationships and with strong growth and profitability. with this combination, we’ll be able to offer customers additional innovation and manufacturing capabilities with a broader and more integrated solution set.
According to DuPont’s press release, the deal is expected to close by Q3 2023 and DuPont plans to pay the purchase price from existing cash balances. DuPont expects the acquisition to bring a double-digit multiple on its 2023 forecast EBITDA and to be immediately accretive to its adjusted earnings per share.
MedPlast Completes Acquisition of Vention Medical
MedPlast, Inc. recently announced that it has completed its acquisition of Vention Medical‘s device manufacturing services arm. The press release states that the acquisition “broadens MedPlast’s manufacturing capabilities and bolsters its position as a leading services provider to the worlds’ largest original equipment manufacturers.”
According to its website, Tempe, Arizona-based MedPlast is a global provider of plastic processing and manufacturing for medical devices. The company services thermoplastic and elastomeric materials and plastic processing. Vention Medical describes itself as a medical device design, engineering, and manufacturing company. The company specializes in molded components and finished device assembly and packaging of interventional and minimally invasive surgical products.
Harold Faig, CEO of MedPlast sees significant potential in the acquisition. He explains that:
This acquisition is a first and important step in our strategic plan to expand our offering to customers [and o]ur goal is to build on our core manufacturing and engineering capabilities to provide our customers with a comprehensive portfolio of end-to-end product solutions.
The president of Vention Medical’s device manufacturing service arm, Bill Flaherty, shares Mr. Faig’s enthusiasm
We are excited to come together with MedPlast. We serve many of the same customers who will benefit from our combined offerings and shared commitment to providing the highest quality standards and facilities in the industry.
The acquisition was initially announced in late February, 2017. According to the press release, the acquisition:
[W]ill extend MedPlast’s global footprint to 22 manufacturing facilities located in key markets through North and Central America, Asia and Europe. Once complete, the acquisition will more than double MedPlast’s size.
MedPlast’s current acquisition may foreshadow the strategic direction of the company. Kevin Swan, a partner at Water Street Healthcare Partners, a Chicago-based private equity firm backing MedPlast recently stated that “[t]his is the first of what we expect will be more strategic acquisitions to build MedPlast into a market leader.” Indeed, before the acquisition, MedPlast was ranked by Plastic News as the 27th largest injection molder in North America, by revenue, in a $40 billion market for medical device services. At the time, the company had an estimated $275 million in annual sales and 800 employees at 7 manufacturing locations. The company now operates 11 manufacturing facilities.
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