Globus Medical Buys Branch Medical Group for $53 Million

Globus Medical Inc. is acquiring Branch Medical Group Inc. (BMG), a third party manufacturer of high precision medical devices, for $52.9 million in cash.

“We are very excited by the vertical integration opportunity afforded by BMG to strengthen Globus, both operationally and financially,” said Dave Demski, president/chief operating officer of Globus. “The potential to expand the amount of products manufactured by BMG in the future represents a significant opportunity for Globus, and, at the acquisition price, is a compelling value.”

Founded in 2005, BMG currently employs more than 100 people in its 50,000-plus square-foot facility in Audubon, Pa. BMG’s 2014 sales were $23.3 million, on which the company earned $9.1 million in adjusted EBITDA (unaudited). Globus expects the acquisition to be neutral to its 2015 earnings as the benefit from the reduced costs of manufactured parts will be delayed as Globus’ current inventory levels are depleted and will be offset by expected investments to increase BMG’s manufacturing capacity.

“BMG has grown to be our top supplier by producing our most complex parts in a highly efficient manner. The close working relationship we have enjoyed over the years has enabled us to work together to get products to the market quickly,” said Andy Iott, senior vice president of Product Development for Globus. “The ability for enhanced collaboration between Globus engineers and BMG manufacturing professionals in the future is an added benefit to the transaction.”

Both companies expect the acquisition to close this month upon satisfaction of applicable closing conditions.

Globus Medical is a spinal implant company based in Audubon, Pa. The company was founded in 2003.