Private Equity Firm Buys Phillips-Medisize

Phillips-Medisize Corp. has a new owner.

San Francisco, Calif.-based private-equity Golden Gate Capital will purchase the company from its current private equity owner Kohlberg & Co. LLC. Kohlberg purchased the Hudson, Wis.-based medical device contract manufacturer in 2010.

Both sides would not disclose the terms of the deal, but did confirm that the company’s headquarters won’t change and that President and CEO Matt Jennings along with the current management team will remain in place. Anonymous sources, however, told the Wall Street Journal that the deal could be worth as much as $800 million. The acquisition is subject to customary regulatory approvals and is expected to close in the coming months.

Phillips-Medisize provides design and manufacturing services—particularly in the area of plastic injection molding—to the pharmaceutical, medical device, diagnostic and specialty commercial markets. The company claims is has annual sales of approximately $600 million, and reports that 75 percent of total revenue generated from drug delivery, medical device, primary pharmaceutical packaging and diagnostic products such as disposable insulin pens, glucose meters, specialty inhalation drug delivery devices, single-use surgical devices and consumable diagnostic components.

“We are excited to partner with Golden Gate Capital, who is fully aligned with our long-term strategic plan and shares our deep-rooted commitment to providing customers with innovative, high-quality and cost-effective solutions with world-class service,” said Jennings. “Golden Gate’s financial support, successful track record of backing manufacturing companies and deep industry relationships will help perpetuate the company’s strong momentum and further solidify our market-leading position. We look forward to working with our new partners as we continue to successfully execute our strategy.”

Rajeev Amara, managing director at Golden Gate Capital said his firm’s latest acquisition is “a terrific opportunity to invest in a strong design and manufacturing service platform with global scale and a proven track record of delivering an exceptionally broad and deep set of capabilities to its customers.” He added that the company is “well positioned for growth in the rapidly expanding medical outsourcing market,” and that his firm is committed to investing to bolster the next phase of the company’s growth.

Chris Anderson, partner at Kohlberg & Co. said that after nearly four years, his firm was “pleased with the outcome” of its investment.

Phillips-Medisize employs more than 3,100 people in 19 locations throughout the United States, Europe, Mexico and China. The company also has design centers in Wisconsin, California and the Netherlands. Plans to establish design center in China were announced late last year.