Patricia Industries has completed the acquisition of Laborie Medical Technologies, a Canadian maker of medical diagnostic tools, from Audax Private Equity for nearly $640 million.

Laborie, based in Mississauga, Ontario, sells equipment used to measure esophageal, gastrointestinal and urological functions. Audax bought the company in 2012 to expand its product lines. Under Audax’s ownership, Laborie completed 14 add-ons.

Headquartered in Boston, Audax backs lower middle-market companies with up to $35 million in Ebitda. In July, Audax purchased RelaDyne, a fuel and lubricant distributor from AEA Investors LP. Audax won Mergers & Acquisitions’ 2015 Mid-Market Award for Private Equity Firm of the Year.           

Laborie is the first Canadian investment for Patricia Industries, which manages the unlisted holdings of Investor AB, the investing arm of the Wallenberg family of Swedish bankers and industrialists. Based in Stockholm, Investor has offices in New York and Palo Alto, California.

The Affordable Care Act has driven healthcare M&A in recent years, but dealmaking in the sector was slow in the first half of 2016. Mergers & Acquisitions’ most recent survey on the sector showed activity is picking up again. Recent deals involving diagnostic tools include: Danaher Corp.’s (NYSE: DHR) agreeing to buy Cepheid (Nasdaq: CPHD) for nearly $4 billion; Pharos Capital Group LLC’s acquiring of gastrointestinal disease diagnostic test manufacturer, TechLab; Zimmer Biomet Holdings Inc.’s (NYSE: ZBH) purchasing biotechnology company CD Diagnostics.

Jefferies LLC and Harris Williams & Co. served as financial advisers to Laborie and Audax, while Kirkland & Ellis LLP and Stikeman Elliott LLP served as legal counsel. Lazard Middle Market and Goodwin Procter LLP served as financial adviser and legal counsel to Patricia Industries, respectively.

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