A&E Medical, a portfolio company of Vance Street Capital, has acquired the cardiothoracic closure business of RTI Surgical for $54 million in cash plus an additional $6 million in contingent cash consideration.
RTI’s cardiothoracic closure business (CCB) provides cardiothoracic sternal metal cable and plating systems. These systems are used to close median sternotomies – a type of surgical procedure in which a vertical incision is made along the sternum, after which the sternum itself is divided, or “cracked”. This procedure provides access to the heart and lungs for any number of surgical procedures. CCB’s products are sold under the Tritium SCP System brand name and are used in many leading cardiovascular hospitals across the world. Click HERE to go to the cardiothoracic closure business website.
“RTI’s cardiothoracic closure business is an excellent strategic fit with A&E Medical,” said Brian Martin, Partner at Vance Street Capital. “The combination of the two businesses will further enhance A&E’s engineering and product development pipeline as well as expand A&E’s reach across the world’s leading cardiovascular hospitals.”
A&E Medical is a designer and contract manufacturer of medical devices primarily focused on single-use products used in cardiovascular procedures. Specific products include high strength sternum closure systems, temporary cardiac pacing wires and extension leads, stainless steel sutures, surgical punches, electrosurgical instruments, and neurosurgical scalp clips. The company, led by its President Eric Sklar, was founded in 1968 and is headquartered south of New York in Farmingdale, NJ (www.aemedical.com).
“The addition of RTI’s advanced sternal closure products solidify A&E Medical as an innovator and leader in the sternal closure market. Under RTI’s stewardship, the cardiothoracic closure business has tripled in size over the past five years and we look forward to the business continuing that growth and innovation under the A&E platform,” said Mike Janish, Partner at Vance Street Capital.
RTI Surgical (NASDAQ:RTIX) is a provider of surgical implants that are used in sports medicine, general surgery, spine, orthopedic, trauma and cardiothoracic procedures. CCB was one of several components of Pioneer Surgical Technology which RTI acquired in July of 2013. RTI is headquartered near Gainesville in Alachua, FL and has four manufacturing facilities throughout the US and Europe (www.rtix.com).
The buy of CCB is the second add-on acquisition for A&E Medical since being acquired by Vance Street in February 2016. The first add-on was completed in December 2016 when A&E Medical acquired Medical Concepts Europe, a Netherlands-based provider of bi-polar, quad-polar and mono-polar temporary pacing wires and single-use patient extension cables specifically for cardio-thoracic surgeries.
Vance Street makes control investments in companies with enterprise values of $30 million to $200 million and EBITDA of $5 million to $20 million. Sectors of interest include aerospace, defense, industrial, and medical. The firm is based in Los Angeles (www.vancestreetcapital.com).
Co-investing with Vance Street in the A&E Medical platform is Lexington Partners, Neuberger Berman Private Equity, RCP Advisors and Madison Capital Funding.
The buy of CCB was funded with senior debt from BMO Harris Bank and BBVA Compass, and mezzanine debt from Madison Capital Funding.
Stephens Inc. was the financial advisor to RTI and Paul Hastings was the legal advisor to Vance Street Capital.
© 2017 Private Equity Professional | August 9, 2017
