STERIS to Acquire US Endoscopy

STERIS Corp. has agreed to acquire US Endoscopy Inc. for $270 million, expanding its presence in the gastrointestinal (GI) market. STERIS will gain direct access to the procedural spaces in the GI market with a franchise of proprietary, single-use consumable medical devices. The deal is expected to close in the second quarter of fiscal year 2013, with STERIS financing the acquisition through a combination of cash on hand and borrowings under its existing credit facility. US Endoscopy will be integrated into STERIS’s healthcare business segment.

“The addition of US Endoscopy to our current portfolio is a natural extension of our presence in the GI market,” said Walt Rosebrough, president and CEO of STERIS. “They have generated double-digit organic growth for many years through successful new product development, and the acquisition provides STERIS immediate scale with a direct sales force in the United States and a strong brand name. This acquisition is aligned with our strategy to expand in areas with attractive market dynamics that are adjacent to our current businesses. We are impressed with the strength of their management team and look forward to working with them to capture the opportunities ahead of us.”

In a recent conference call to investors and others, Rosebrough also estimated the GI market at $700 million in U.S. and $2 billion globally. “This is the most significant deal STERIS has done in many years,” he said on the call.


“We are absolutely delighted to have the opportunity to become part of STERIS, a company we respect and know well,” said Gulam Khan, president, CEO and co-chairman of US Endoscopy. “Not only will we gain the size and scale necessary to continue to innovate and grow over the long term, we will also ensure that we can and will remain a vital part of the greater Cleveland community. While we have had great success the last two decades, having the support of STERIS will better enable us to take full advantage of global opportunities.”

In 2011, US Endoscopy generated about $70 million in revenue. STERIS Chief Financial Officer Mike Tovich said that the acquisition, together with the $7 million STERIS will pay for property and office infrastructure, will reduce the company’s earnings per share by approximately 5 cents this fiscal year.

STERIS Corp. is based in Mentor, Ohio, and is focused on infection prevention, contamination control, surgical and critical care technologies. US Endoscopy focuses on both the GI and urology spaces, and is headquartered in the suburb of Cleveland as STERIS.