Symmetry Medical said Monday it bought the surgical instrument business of Codman & Shurtleff, Inc. a Johnson & Johnson subsidiary, for $165 million cash. The transaction, which covers Codman's hand-held surgical instruments, some disposable products and sterilization containers, is expected to close by the end of the year.
Warsaw, Ind.-based Symmetry said the new line will be folded up with its Specialty Surgical Instrumentation business, which it acquired in 2007, into a new division: Symmetry Surgical. This will be based in Nashville, Tenn., and led by Thomas J. Sullivan, Symmetry's president and CEO.
In combined annual sales, SSI and Codman's surgical division take a $100 million chunk out of the global $1 billion general surgical instrument market, Symmetry said. Codman's surgical business' pro forma revenue for 2011 is around $60 million, Symmetry said.
In a statement, Sullivan said the purchase helps diversify Symmetry's revenues with a higher-margin, hospital direct business, and brings them new products to market to hospital and OEM customers.
Symmetry said it would finance the purchase through an amendment to its senior secured credit facility and by issuing $65 million of senior subordinated notes. The company expects the purchase to be breakeven on a GAAP earnings per share basis next year, but accretive on a cash EPS basis.