UK-based surgical instrument maker Surgical Innovations is looking to purchase UK NHS medical product supplier Elemental Healthcare for $12.4 million (GBP £9.4 million), according to a Yorkshire Post report.
Elemental Healthcare operates as an exclusive distributor of Surgical Innovations products, according to the report, with the acquisition expected to have an immediate positive impact on SI’s margins and profitability.
Berkshire-based Elemental Healthcare has 19 employees, and is owned by co-founders Adam Power and David Marsh, who will join the board of Surgical Innovations as part of the deal.
“Coming together was the natural next step for 2 businesses that have had such a long-standing and fruitful partnership. Adam and David, the principals at Elemental, have a great pedigree in the medical device section and we look forward to benefiting from their insights into our new product initiatives and business development here and abroad,” Surgical Innovations exec chair Nigel Rogers said, according to the Yorkshire Post.
Surgical Innovations said it is looking to raise $7.2 million (GBP £5.5 million) through a new offering, alongside a $3.3 million (GBP £2.5 million) debt facility to help pay for the acquisition, according to the paper.
“There are clear and obvious benefits to margins and earnings as we add a highly profitable and cash generative business to the group, but this also provides us with access to an experienced direct sales force and the new products distributed by Elemental will widen the range of products on offer to surgeons in the NHS and UK private hospitals. All acquisitions have some integration risks attached to them, but having worked with the Elemental team and having such a high level of inter-dependency we expect this will ease the integration process,” Rogers said, according to the report.