Batesville, Ind.-based Hill-Rom, one of the world’s largest suppliers of the medical beds and other health care equipment, said the acquisition would help broaden its portfolio of surgical products and expand its reach in North America and Europe.
Aspen Surgical, which has annual revenues of approximately $120 million, makes disposable medical products focused on patient and staff safety in operating rooms. Its brands include Colby fluid protection products, Bard-Parker safety scalpels, and a variety of other wound-care, ophthalmic and specialty needle products.
The acquisition should mean continued growth for 13-year-old Aspen, which employs 300 in Caledonia and more than 700 worldwide. Hill-Rom has indicated that it plans to continue investing in Aspen through acquisitions, new products and further expansion of its sales force, according to longtime Aspen executive Terry O’Rourke, who will head up the company following the acquisition.
Greg Pritchard, formerly CEO of Aspen Surgical, will become senior vice president and president of surgical and respiratory care at Hill-Rom. He’ll oversee the Aspen division as well as Hill-Rom’s existing business units in the segment.
“With the addition of Aspen Surgical, Hill-Rom is well-positioned for growth and geographic expansion in our surgical business, particularly in the safety products segments,” John J. Greisch, president and CEO of Hill-Rom, said in a statement.
Founded in 1999 by Grand Rapids entrepreneur Daniel J. Bowen, Aspen grew from a single operation in Byron Center specializing in niche disposables. Bowen sold the company to Lake Forest, Ill.-based RoundTable Healthcare Partners in 2006, retaining a minority stake. He now heads Dempsey Ventures, a holding company that invests in medical products.
Between 2006 and 2010, RoundTable helped Aspen make seven add-on acquisitions including Philadelphia-based operating room supplier Colby Manufacturing Corp.; the surgical skin-marker product line of San Fernando, Calif.-based Precision Dynamics Corp.; and the wound-care business of British firm Unomedical Ltd. Following the 2010 acquisition of scalpel-maker Bard-Parker, RoundTable helped Aspen build a direct U.S. sales force organization, which further accelerated the company’s growth.
The $400 million sale price represents a multiple of approximately 10.5 times 2012 EBITDA, Hill-Rom said during a quarterly conference call. The price netted RoundTable a reported four times gross return and 40 percent IRR on its investment in Aspen.
“It’s a good outcome for everyone,” O’Rourke said.