Devicor Medical Products Group LLC, the medical device holding company that bought the breast-care business of Johnson & Johnson’s (NYSE:JNJ) Ethicon Endo-Surgery two weeks ago, drummed up $151.5 million in an equity offering.
Pleasant Prairie, Wis.-based Devicor raised the money from seven investors beginning July 9, according to a Securities & Exchange Commission filing. Nearly $3.4 million will be used to cover three years’ worth of salaries and bonuses for Devicor’s CEO, Thomas Daulton, and executive vice president Jonathan Salkin, according to the filing.
Daulton declined to say whether the investment also would be used to pay for the new breast-care division, which Devicor will call Mammotome. Financial terms of the deal were not disclosed.
“The two are not necessarily related,” a spokeswoman said about the SEC filing and the acquisition.
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 based 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 as managing director at the Royal Bank of Scotland plc, he worked for Cardinal’s medical products & services group. Seven of the nine executives named on Devicor’s website came from Cardinal or CareFusion.
Daulton has moved Mammotome to a newly leased office in Sharonville, Ohio. The breast-care business sells the Mammotome Breast Biopsy System and associated tissue markers in 50 countries.
He plans to move Devicor’s headquarters there, too, according to the spokeswoman. One reason for the move may be the $1.5 million job creation tax credit received by the business earlier this year, when it was still part of Ethicon Endo-Surgery.
Mammotome is hiring 300 former Ethicon Endo-Surgery workers to help run the company. About half of those employees have already 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 on new product development while shopping for new products and acquisitions.
He also told the 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.