Devicor Medical Products Group LLC, the medical device holding company that bought the breast-care business of Johnson & Johnson‘s Ethicon Endo-Surgery two weeks ago, has raised $151.5 million.
Devicor Medical in Pleasant Prairie, Wisconsin raised the money from seven investors, beginning on July 9, according to a Securities and Exchange Commission (SEC) filing. Nearly $3.4 million of that will be used as salaries and bonuses for Devicor’s CEO, Thomas Daulton, and executive vice president, Jonathan Salkin, for three years, according to the filing.
Daulton declined to say whether the investment also would be used to pay for the breast-care business, renamed Mammotome, a division of Devicor Medical Products, whose price remains undisclosed. “The two are not necessarily related,” a spokeswoman said about the SEC filing and the acquisition.
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Mammotome was Devicor Medical’s first acquisition since being set up in late 2008 with a $250 million investment from Chicago private equity firm GTCR Golder Rauner LLC. GTCR partnered with veteran medical device executive Daulton to buy “established interventional medical device businesses that make and sell products to clinicians in hospitals, surgery centers or ambulatory clinics.”
Most recently, Daulton was general manager of the Interventional Specialties and Med Systems divisions of Cardinal Health Inc., the drug and medical products distributor in Dublin, Ohio. Cardinal Health consolidated and then spun off its medical technologies division CareFusion a year ago.
Salkin, too, has ties to Cardinal Health. Prior to his most recent appointment managing director at the Royal Bank of Scotland plc, Salkin worked for Cardinal’s Medical Products & Services Group. Seven of the nine executives pictured at Devicor’s leadership website came from Cardinal or CareFusion.
Daulton has moved Mammotome to a newly leased office in Sharonville, Ohio. The breast-care business sells its Mammotome Breast Biopsy System, and tissue markers (MammoMARK, MicroMARK and CorMARK) used for diagnostic sampling and management of potentially diseased breast tissue, in 50 countries.
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He plans to move Devicor’s headquarters there, too, according to a spokeswoman. One reason for the move may be the $1.5 million job creation tax credit received by former Ethicon Endo-Surgery business earlier this year.
Mammotome is hiring 300 former Ethicon Endo-Surgery workers to help run the company. About half of those employees already have moved to the Sharonville facility, according to the Cincinnati Enquirer.
Although Daulton is not saying how much Mammotome cost for competitive reasons (it’s one of three top players in the vacuum-assisted breast biopsy market), he told the Enquirer he intends to invest about $60 million in developing products while shopping for new products and acquisitions.
He also told the Cincinnati newspaper that Mammotome likely would invest another $200 million to $250 million over the next few years to build its own manufacturing plant and open physician training facilities, among other growth projects.
