Devicor Medical Products Inc., the Pleasant Valley, Wisconsin, fledgling holding company backed by Chicago private equity firm GTCR Golder Rauner LLC, has made its first acquisition: the breast care business of Johnson & Johnson’s Ethicon Endo-Surgery unit near Cincinnati, Ohio.
Financial terms of the deal were not disclosed.
But nearly 300 Ethicon Endo-Surgery employees who are connected with the breast care unit now work for Mammotome, a division of Devicor Medical Products, said company spokeswoman Mary Roberts. Rather than moving its first acquisition to Wisconsin, Devicor executives are moving to Sharonville, Ohio, where the breast care unit is located, Roberts said.
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The former Ethicon Endo-Surgery breast care portfolio is sold in 50 countries and includes the Mammotome Breast Biopsy System and tissue markers (MammoMARK, MicroMARK and CorMARK) used for diagnostic sampling and management of potentially diseased breast tissue, Devicor said in a release.
As part of the agreement, Devicor also acquired marketing and distribution rights for gamma detection systems made by Neoprobe Corp. (OTCBB: NEOP) in Dublin, Ohio.
“Mammotome is a global leader in vacuum assisted breast biopsy devices and is a brand that is recognized worldwide,” said Tom Daulton, Devicor’s chief executive, in the release. “Today, we are excited to begin the work of further developing the Mammotome brand globally.”
Devicor, which is led by mostly former executives of Cardinal Health Inc. (NYSE: CAH), the Dublin, Ohio pharmaceutical and medical product distributor, or its former CareFusion business, approached Ethicon Endo-Surgery about buying its breast care business in late March, according to MassDevice, a MedCity News content partner.
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Johnson & Johnson (NYSE: JNJ) had been shopping its breast care business because it wanted to invest in businesses with higher growth potential, according to the Wall Street Journal. J&J is among drug companies that are streamlining their businesses because of rising regulatory hurdles and drug-development costs, as well as more competition from generic drugmakers.
Daulton said in an early March release that his company had $250 million from private equity firm GTCR to buy “established interventional medical device businesses that make and sell products to clinicians in hospitals, surgery centers or ambulatory clinics.”
Devicor’s first acquisitions are supposed to “provide infrastructure and personnel in key areas such as manufacturing, R&D, engineering, sales & marketing, finance and human resources,” according to the release.
Founded in 1980, GTCR says it pioneered the “leader strategy,” that is, finding and partnering with leaders as the first step to building market-leading companies through acquisitions and organic growth.
“GTCR decided it wanted to get into the medical device industry and it tapped into Tom Daulton’s expertise to do that,” said Devicor spokeswoman Roberts.
Most recently, Daulton was general manager of Cardinal Health’s Interventional Specialties and Med Systems divisions, both fast-growing businesses where he expanded revenue through a combination of organic growth, licensing and acquisitions.
“First and foremost, Devicor is a medical device company,” Daulton said in the March 10 release. “The financial side of our business is critically important, and we’re enthusiastic about the number of compelling investment opportunities we see in the market. But, at the end of the day, we’re looking to advance the medical device industry and improve patient outcomes by building on something that works.”
