Tony Freeman: Evolving Players in the Medical Device Supply Chain Today’s medical device supply chain was shaped by two far-reaching trends: A realization among OEMs over the last 20 years about outsourcing’s ability to reduce manufacturing costs while producing safe, reliable products; and OEMs’ tendency to outsource to larger contract manufacturing firms when possible. Reasons included financial stability, fewer vendors to coordinate in product manufacturing, and confidence in larger firms’ abilities to invest in new facilities, equipment, and quality systems. Beginning in 2000, OEMs’ desire for outsource manufacturing partners of scale often took the form of roll-ups, with companies like Accellent/Lake Region Medical, Tecomet, Freudenberg Medical, and Medplast built through acquisitions of smaller, well-established medical device supply chain entities. Read full article on MPO Magazine
News/Reports
WellWorx Energy has acquired Newgate Instruments, formerly a business unit of Joining Industries LLC. A. S. Freeman Advisors advised Joining Industries on this transaction.
Tecum Capital Partners and Western Allegheny Capital Partners have invested in Oberg Industries, Inc. A. S. Freeman Advisors advised Oberg Industries on this transaction
ARCH Global Precision has acquired Universal Precision Instruments, Inc. A. S. Freeman Advisors advised Universal Precision Instruments on this transaction.
Tony Freeman was this year’s first presenter at the MPO Summit (October 11-12, 2018) in Broomfield, CO. Talking about the State of the Medtech Industry, the talk covered large-scale trends; several categories of risk, along with responses to deal with them; and rules for prospering in the current market. MPO Magazine covered the Summit in real time, with their summary of all speakers here. The presentation in full is now posted on this site. If you are interested in having this presentation for your company, or have any questions or comments, please contact Tony Freeman at tfreeman@asfreeman.com.
I’ll be presenting on “Global Trends in the Medical Device Industry and the Supply Chain” at the MPO Summit in Colorado later this week, Thursday October 11 at 9am. If you’re attending, please say hello.
In early 2018, the Medical Device Manufacturers Exchange (mdmX) undertook the first survey of financial, commercial, and operational metrics across medical device supply chain companies. Designed by six mdmX member company executives, the Survey covers financial and operational topics of interest. mdmX partnered with Rodman Publishing’s MPO Magazine to reach a broad cross-section of supply chain managers. Though response was modest, responding companies provided detailed and precise data. The summarized responses point to an industry that ended 2017 economically healthy, growing, and investing for the future. Read mdmX’s analysis of results Read MPO’s discussion of results
I was asked to contribute an article for the 15th anniversary of MPO Magazine. In it, I reflect upon the growth of the medical device industry and supply chain since 2003. In addition to a discussion of the trends for the last 15 years, there is a section on future trends. Read the full article here. If you have comments or questions, please feel free to contact me at tfreeman@asfreeman.com.
ThomasNet reports CNC machining sourcing through their online service has grown by over 33% in last five weeks. The scramble to find qualified machinists pervades every corner of American manufacturing. Options remain fixed at either hire, buy a company with machinists, or take the long view with apprentice and training programs. To learn more about what supply chain companies are doing please feel free to contact Tony Freeman at tfreeman@asfreeman.com.
Cadence, Inc., a medical device contract manufacturer has agreed to be acquired by the private equity firm Kohlberg & Company. Terms were not announced. Cadence had its origins in edged and pointed instruments and expanded to full contract manufacturing with the addition of assembly and additional metal working facilities. The company’s 2017 revenues were $96.7 million with $20 million in EBITDA. Kohlberg’s strategy has been to acquire platform companies with an eye to the acquisition of additional bolt-on acquisitions.