Globus Medical to acquire Branch Medical Group

Audubon, Pennsylvania – Globus Medical  Inc. officials announced that they have entered into an agreement to acquire Branch Medical Group Inc., a third party manufacturer of high precision medical devices. Under the terms of the agreement, Globus has agreed to pay $52.9 million in cash, subject to certain closing adjustments, for BMG on a cash-free, debt-free basis.

“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,” said Dave Demski, president & COO of Globus. “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, founded in 2005, employs more than 100 highly skilled people in their 50,000+ square-foot facility. BMG’s sales for 2014 were $23.3 million, on which they earned $9.1 million in adjusted EBITDA (unaudited). 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.

“BMG has grown to be our top supplier by consistently producing our most complex parts in a highly efficient manner. The close working relationship we have enjoyed over the years has enabled us to work together to get products to the market quickly,” commented Andy Iott, senior VP of product development of Globus. “The ability for enhanced collaboration between Globus engineers and BMG manufacturing professionals in the future is an added benefit to the transaction.”

The parties expect the closing of the acquisition to occur this month following satisfaction of the applicable closing conditions.

Source: Globus Medical Inc.