A&E Medical Corp., backed by Los Angeles private equity firm Vance Street Capital LLC, has reached a deal with RTI Surgical Inc. to acquire its cardiothoracic closure business. Lexington Partners, Neuberger Berman Private Equity funds, RCP Advisors and Madison Capital Funding LLC all co-invested equity alongside Vance Street Capital in support of the transasction. This deal serves as A&E Medical’s second add-on acquisition.
Demand for more personalized treatment options, an increasing aging population, and a constant change in healthcare technology has kept medical device manufacturers busy. Recent deals include: Arlington Capital-backed Avalign Technologies’ acquisition of medical device distributors Thortex and Millennium Surgical.; Boston Scientific’s (NYSE: BSX) deal to buy heart valve replacement maker Symetis; Teleflex Inc.’s purchase of Vascular Solutions Inc. for $1 billion; and Medtronic plc’s (NYSE: MDT) acquiring of HeartWare International Inc. for nearly $1.1 billion. GTCR also launched a platform company to fund medical device deals.
Headquartered in Alachua, Florida, RTI Surgical provides surgeons with biologic, metal, and synthetic implants. The company’s implants are used in sports medicine, general surgery, spine, orthopedic, trauma and cardiothoracic procedures. The deal for RTI’s cardiothoracic closure business will drive A&E Medical's engineering and product development pipeline with its sternal cable and closure abilities. RTI has four manufacturing facilities throughout the U.S. and Europe.
Founded in 1968, A&E Medical designs and manufactures a variety of medical devices. The buyer’s product portfolio includes: temporary cardiac pacing leads, illuminated vein harvest retractors, electrosurgical instruments, neurosurgery products, neurology scalp clips, stainless steel sternotomy sutures, sternal wires, surgical punches, manual dissectors, scissors, and industrial wire cables. A&E is based in Farmingdale, New Jersey. A&E Medical acquired cardiovascular device maker Medical Concepts Europe in December 2016.
Vance Street Capital is a middle-market private equity firm. The Los Angeles-based firm backs businesses in the medical, aerospace, defense and industrial sectors. Vance Street Capital acquired A&E Medical in February 2016 from its second PE fund.
Stephens Inc. is acting as financial adviser to RTI Surgical and Holland & Knight LLP is serving as legal counsel. Paul Hastings LLP is serving as legal adviser to Vance Street Capital. The transaction was funded with senior debt from BMO Harris Bank (NYSE: BMO) and BBVA Compass (NYSE: BBVA), and with mezzanine debt from Madison Capital.