With their $1.7 billion merger complete, the combined company boasts roughly $1.5 billion in revenues and more than 9,000 employees globally, making it one of the world’s largest medical device outsource manufacturers serving the cardiac, neuromodulation, orthopedic, vascular, advanced surgical and portable medical markets.
The deal allows Greatbatch to offer a more comprehensive portfolio for its customers through the Greatbatch Medical, Lake Region Medical and Electrochem brands. Frisco, Texas-based Greatbatch develops and manufactures medical device technologies for the cardiac, neuromodulation, vascular and orthopedic markets; and batteries for high-end niche applications in the portablemedical, energy, military and environmental markets.
Lake Region Medical, on the other hand, specializes in point-of-care products in the cardiovascular and advanced surgical markets; these include offerings in electrophysiology, vascular access, cardiovascular, urology, oncology, orthopedics, laparoscopy, biopsy/drug delivery, and arthroscopy. The company was formed through last year’s acquisition of Lake Region Medical by Accellent Inc. Investment firms Kohlberg Kravis Roberts & Co. and Bain Capital bought Massachusetts-based Accellent in 2005. It adopted the Lake Region Medical name shortly after Accellent bought Minnesota-based Lake Region.
“Through this deal, Greatbatch has added scale and diversification to enhance customer access and experience,” Greatbath President/CEO Thomas J. Hook said.
Greatbatch partially funded the acquisition by securing a $1.96 billion financing package led by M&T Bank Corporation, Credit Suisse, and KeyBanc Capital Markets. The package itself is comprised of $1.6 billion in senior secured credit facilities, and $360 million of 9.125 percent senior notes, due in 2023. Greatbatch paid about $478 million in cash and issued approximately 5.1 million shares and options to Lake Region Medical and assumed roughly $1 billion of net debt.
The agreement has been unanimously approved by the boards of directors of both companies. Current Greatbatch stockholders now own approximately 83.4 percent of the combined company and current Lake Region Medical shareholders own about 16.6 percent.
As with any (corporate) marriage, Greatbatch-Lake Region Medical is considering a name change, hoping to eventually rechristen itself Integer Holdings Corporation. In a news release announcing the acquisition’s closing, the newly united company explained the logic behind its preferred name: Integer is defined as complete, whole, and comprehensive, and represents the joining of Greatbatch and Lake Region Medical as well as the combined firm’s product and service offerings provided to customers.
The new name is subject to Greatbatch shareholder approval at the May 2016 annual meeting.
“Combining talents from both organizations will allow us to benefit from the best possible knowledge and insights to ensure we successfully integrate both companies,” Hook said.