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Globus Medical to acquire Branch Medical Group
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Globus Medical recently announced it has entered into an agreement to acquire Branch Medical Group.
According to a company press release, Globus will pay $52.9 million in cash for Branch Medical Group (BMG) on a cash-free, debt-free basis. The transaction is expected to close in March 2015.
“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,” Dave Demski, president and chief operating officer of Globus, stated in the release. “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 was founded in 2005 and is located in Audubon, Penn. The 2014 sales for BMG were $23.3 million, on which they earned $9.1 million in adjusted EBITDA (unaudited). According to the release, 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.