On Monday, December 18, 2023, Sweden's EQT** announced that it has reached an acquisition for a total of $3.4 billion to buy the catheter giant Zeus from the Tourville family. This huge acquisition also marks EQT's highest acquisition value in the healthcare sector this year. The transaction is expected to close in the first quarter of 2024, subject to regulatory approvals and closing conditions.
EQT also announced that John Groetelaars, former CEO of Hillrom and industrial advisor to EQT, will serve as executive chairman of Zeus following the transaction. Ethan Waxman, Partner in EQT's Private Equity Advisory team, said: "EQT has closely followed the medical device components industry for many years, and we believe that ZEUS is uniquely positioned to position itself in the end markets it serves with its unrivalled materials science and process expertise. ”
Founded in 1966 in New Jersey by Tourville as a manufacturer of catheters for medical applications, Zeus is a global leader in advanced polymer solutions for tubing, catheter assemblies, heat shrink tubing, bioresorbable and implantable medical products, sutures, and more. Zeus, which has nearly $200 million in earnings before interest, taxes, depreciation and amortization (EBITDA) in the most recent year, is currently controlled by the family of its founder, Frank Tourville, who passed away in 2021.
The company moved its headquarters to South Carolina in the 1980s and entered new areas and international markets in the decades that followed. The company uses an extrusion process to mold materials such as plastics into different shapes to produce parts, which are then sold to customers in industries such as medical devices, aerospace and automotive.
For more than 50 years, ZEUS has been providing innovative, mission-critical components to enhance the efficacy and performance of highly complex catheters used in life-saving, minimally invasive medical procedures, and other applications. Headquartered in Orangeburg, South Carolina, the company has eight facilities in the United States, one of which is located in Letterkenny, Ireland. With approximately 2,400 employees worldwide, ZEUS serves more than 300 customers in more than 100 countries, including leading medical device manufacturers, contract equipment manufacturing organizations, academic institutions, and industrial customers in industries such as aerospace, semiconductor, and automotive.
On September 14, ZEUS officially opened a new plant in Arden Hills, Minnesota after more than 1 year of preparation and construction. The company chose to open its facility in Arden Hills, Minnesota, not only because of its proximity to existing customers, but also because of the company's ability to expand its workforce due to local transportation and amenities. Arden Hills is located on the outskirts of Minneapolis, where many medical device companies are concentrated, and the new Zeus plant is surrounded by companies such as 3M, Abbott, Poco and Medtronic.
Cathx Medical will use the 75,600-square-foot building to house a state-of-the-art R&D lab and cleanroom to design, develop and validate new medical tubing, as well as provide customers with capabilities including laser cutting, ablation and welding. The plant is expected to create more than 100 jobs, including engineers, project managers, technicians and product manufacturing personnel. Cathx Medical, a company acquired by Zeus in June 2021, provides catheter-based design, development, and manufacturing services to medical device OEMs and companies.
The Minnesota facility is an important step in our geographic expansion for several reasons. Steve Peterson, President and CEO of Zeus, said. "The state has a long history of medical device innovation, and our geographic proximity to our customers will support deeper collaboration in early catheter design and development. In addition, the facility has enabled us to significantly scale up our catheter manufacturing to meet growing global customer and market demand. "This facility paves the way for our one-stop-shop service, expanding our end-to-end catheter design and manufacturing capabilities.
This is an important step for both our customers and the industry," said Suresh Sainath, General Manager of Zeus' Catheter Solutions Division. "It also lays a cornerstone for future strategic collaborations between our catheter and polymer customers to drive industry-leading catheter innovation forward. ”
In September, Reuters reported that Zeus was exploring a valuation of $4 billion or more, including debt, and attracting investment bank Goldman Sachs Group Inc. (GS.).n) to cooperate, and now the boots are finally on the ground.
Ethan Waxman, a partner on EQT's private equity advisory team, said: "EQT has closely tracked the medical device components industry for many years, and we are excited to partner with the company and invest in its next phase of growth, its people and the communities it serves, while maintaining Frank Tourville SRvalues and a commitment to excellence, which EQT shares. ”
Steve Peterson, President and CEO of Zeus, added, "We are thrilled to join the EQT family. ZEUS has gained momentum in recent years due to strategic global expansion plans. The acquisition accelerates this momentum and growth by supporting future expansion, new product innovation, process improvement, technology transformation, and enhanced capabilities. ”
For more than 50 years, ZEUS has been providing innovative, mission-critical components to enhance the efficacy and performance of highly complex catheters used in life-saving, minimally invasive medical procedures, and other applications. ZEUS's components enable minimally invasive interventional procedures that can significantly improve health outcomes, including faster patient health and reduced pain at a lower cost, compared to traditional open procedures.
As a leading innovator of polymer-based solutions, the increasing demand for precision, high-performance catheters to support the ** segment, including structural cardiac, peripheral, and neurovascular interventions, is expected to continue to drive ZEUS as the population ages and chronic diseases become more prevalent.
Medical product line.
ZEUS specializes in providing high-quality components for coronary artery, heart rhythm management, cardiac structure, neurological, peripheral, and gastrointestinal interventional medical devices. Extrusions based on the following materials are available:
FEP: Fluorinated ethylene propylene.
PTFE: Polytetrafluoroethylene.
PEEK: Polyetheretherketone.
Fluoropeelz tearable heat shrink tubing.
ETFE: ethylene tetrafluoroethylene.
PVDF: polyvinylidene fluoride.
PFA: perfluoroalane.
ECTFE: ethylene chlorotrifluoroethylene.
ABSORV bioresorbable material.
Bioweb Electrostatic Textile Nonwovens.
AEOS expanded PTFE.
Nylon 11, 12 and their lubricated versions.
Pebax and its lubricated versions.
For example, the PTFE thin-walled multi-lumen liner is specially designed for adjustable elbow catheter sheaths, and through integrated thin-wall extrusion, it integrates the main cavity and the surrounding cable cavity, and the number and spatial distribution of the wire cavity can be customized. It effectively solves the difficult spatial positioning problem in the production of adjustable bend catheters, and greatly reduces the production time and improves the yield, which is an excellent solution for the next generation of adjustable bend catheters.
Highly lubricating PEBA blends or nylon-like materials retain the same mechanical property parameters as the original material for use in the outer layer of the catheter, but with a 40% or 60% reduction in coefficient of friction, resulting in reduced drag, improved performance, and reduced viscosity to dust (without affecting the bonding effect).
For certain applications that require higher torque, flexibility, strength, pushability, kink resistance, or burst resistance, braided reinforced polyimide tubing is a new type of tubing. Zeus Braided Reinforced Polyimide Tubing can be braided in both full-load and half-load patterns and are produced with different PPI (Nodes per Inch) depending on your specifications. It can also be reinforced with spring coil weaving according to different WPI (turns per inch).
The second generation of absorbable tubing improves the yield of laser engraving. Zeus has improved extrusion technology and improved control over the original process, resulting in absorbable tubes up to 8 inches long and more uniform wall thicknesses, so that customers can engrave brackets with femtosecond lasers without the need to frequently correct laser parameters, improve yields, and reduce processing time.
The TieLayer liner coats a layer of ultra-thin PEBAX on top of the PTFE etching layer to keep the etching layer in optimal condition and increases the affinity of the liner surface to PEBAX, nylon, and stainless steel braided wire. According to ZEUS's internal evaluation, the tie-layer can generally increase the adhesion by 20% to 40% in the case of braided layers, especially for high-density braided catheters, catheters above 18F and below 4F.
In addition to providing a range of medical catheterization products for medical operating rooms, ZEUS has also introduced a new MRI-compatible LCP monofilament product for vascular interventions**. Magnetic resonance imaging (MRI) uses a strong magnetic field to image the body and is known as the ** standard for diagnostic imaging. This non-invasive imaging technique can be used to diagnose a wide range of medical conditions due to its superior ability to visualize soft tissues.
However, currently, vascular interventions such as cardiac ablation, percutaneous transluminal coronary angioplasty (PTCA), and transcatheter aortic valve replacement (T**R) rely on fluoroscopy (X-ray) as a means of surgical visualization. These interventions generally use catheters made of metals such as stainless steel for flexibility and kink resistance. Unlike MRI, surgery using X-rays exposes patients and clinicians to ionizing radiation.
With the growing interest in developing MRI-compatible intravascular catheters, Zeus Industrial Products Inc("ZEUS") announces the availability of MRI-compatible LCP monofilaments. This technique overcomes the significant limitations of other vascular visualization procedures and thus eliminates radiation exposure. With its superior tensile strength, LCP monofilament provides a safe braiding option for medical device manufacturers designed to take full advantage of MRI for physicians and patients. LCP is a thermoplastic resin with unique properties that offer a number of unique and desirable properties, including superior mechanical strength, autoclaving heat resistance, and chemical inertness.
Device CDMO is a contract customized R&D and production, which mainly provides medical device companies with services such as process R&D and preparation, process optimization, registration and verification, and mass production of innovative products, which can help medical device companies reduce comprehensive costs, accelerate product technology transformation, and shorten the product launch cycle.
As a business model that provides customers with integrated services from product design and development to manufacturing, medical device CDMO has developed mature in foreign countries and formed a complete industrial chain. However, for a long time in the past, the CDMO of domestic medical devices was still in its embryonic state and needed to be further developed.
Device CDMO is a very mature business model in the world. Among them, Medtronic, Stryker, Johnson & Johnson, Boco, Abbott, GE Healthcare, Siemens, Philips, Roche, Xerox and other global device giants have commissioned products produced by CDMO.
At the same time, the field of device CDMO has also given birth to companies with a market value of 10 billion US dollars, such as Flex with a market value of 970.7 billion US dollars, Jabil market capitalization reached 110$1.3 billion (Note: April 6 data). It should be noted that Flextronics, Jabil and other companies not only carry out CDMO services in the field of medical devices, but also provide services in electronics, automobiles, aviation and other fields.
According to Sullivan statistics, the global CDMO market size has grown from $39.4 billion in 2017 to $63.2 billion in 2021, with a compound annual growth rate of 125%, which is expected to reach $124.3 billion by 2025 and $231 billion by 2030. With the rapid development of the market, industry investment, financing and mergers and acquisitions are also becoming more and more popular, and IPO listings have begun to increase, such as the recent acquisition of Paragon Medical by AMETEK for $1.9 billion, and Biomerics, the world's leading manufacturer of interventional medical devices, announced the acquisition of the medical business of Precision Concepts International and Precision Concepts Group.
Domestic medical device companies can also consider entrusting device CDMO to enjoy industry and policy development dividends in the early stage of their development, reduce cost investment, accelerate product approval and listing, and enhance the core competitiveness of enterprises and the market competitiveness of products.
Article**: Medical Device Innovation Network.