Orthopedic surgical instrument-maker Precimed Group has won a syndicate of new investors to support its an expansion and acquisition strategy.
Precimed said it closed a SFr34 million ($27 million) deal with venture capital investors, in a transaction led by the Bern-based BVGroup Private Equity.
The syndicate also includes Ypsomed Holding AG of Burgdorf, HBM BioVentures of Zurich, and Vinci Capital Switzerland of Ecublens.
The deal, which comes on the back of several years of double-digit growth, involves the purchase of a combination of new shares and existing shares.
"The investment gave one of the early shareholders a partial exit," explained Patrick Berdoz. But Precimed's 45-year-old CEO declined to disclose further details on what proportion of the company the new investors have obtained.
The new capital will finance organic growth and enable strategic acquisitions, according to Berdoz.
The 11-year-old, Orvin-based medical technology firm has become a leading developer of surgical instruments used to implant new hips and knees, exploiting know-how gleaned in its early days of existence as a maker of precision cutting tools for the watch industry.
Watches and medical instruments
Originally a division of what is now a giant Swiss watchmaking concern, Swatch Group, Precimed emerged as a management buyout in 1994.
When Berdoz and John Ayliffe, who heads the firm in Switzerland, joined the company in 1998, it subsequently focused product development on medical technology.
Its niche is the booming minimally invasive orthopedic surgery market. It sells orthopedic implant tools, reamers, drills, screws, and accessories to the likes of Zimmer Holdings Inc, Stryker Corp, and Medtronic Inc., which then badge, or label, the devices with their own brand name or under Precimed's name.
"The business model is similar to that of Ypsomed's," said Daniel Kusio of BVGroup.
According to Ayliffe, Precimed's 30 to 40 per cent annual growth for the past three years is due to its ability to build on success in the European market and translate it into success in the United States.
Berdoz who now works out of the firm's Philadelphia office (US headquarters) said sales are geographically distributed, typically 55 per cent of in the US, 35 per cent in Europe, and five per cent in Asia.
One reason for its healthy growth rate is that Precimed has been successful in honing and refining its products to meet the needs of the US market, currently the largest market for minimally invasive orthopedic implants.
"We supply seven of the top ten original equipment manufacturers (OEM) firms worldwide, most of which have their decision making centers in the US," said Berdoz, adding that the firm is forecasting annual sales this year of SFr 55 million.
"When we first entered the US market, our competitors here thought they we would go away, but our success has forced them to stand up and take notice," recalls Berdoz.
He attributes success to substantial investment in R&D, timely innovation, and working closely with its customers, the OEMs.
The firm sees its number one competitor in Symmetry Medical Inc, based in Warsaw, Indiana. Symmetry also sells orthopedic implants to OEMs, including hips and knees, and the surgical instruments that are used to implant such devices. Its annual sales are $205 million.
Berdoz says his firm will be looking to acquire, among other things, hip and knee implant makers.
by Valerie Thompson