Medical Action Industries Inc. Completes Acquisition Of AVID Medical, Inc.
Medical Action Industries Inc. (NASDAQ: MDCI) announced the acquisition of AVID Medical, Inc., a leading provider of custom procedure trays serving the healthcare industry. AVID’s product line of custom procedure trays is complementary to Medical Action’s leading position in single use medical products. Medical Action expects that the acquisition will increase its ability to serve healthcare providers in acute care facilities and surgery centers. The combined competencies, clinical expertise and extensive healthcare industry knowledge of both organizations should enhance the company’s ability to provide comprehensive and innovative solutions that enable healthcare providers to improve patient care while optimizing clinical and economic outcomes.
“This strategic acquisition strengthens Medical Action’s core capabilities in developing, manufacturing and delivering quality medical products to hospitals and healthcare institutions,” said Paul D. Meringolo, CEO and Chairman of the Board of Medical Action Industries Inc. “The addition of custom procedure trays increases the breadth and depth of our product offerings and progresses us toward our initial goal of attaining $500 million in revenues. AVID reported sales of custom procedure trays of approximately $136 million during its most recent fiscal year ended March 31, 2010 within a market segment that we estimate to be in excess of $2 billion. This transaction enhances our leadership position and relevancy within our markets and is another step forward in positioning ourselves for future growth. We also continue to invigorate our sales and marketing capabilities and are excited to execute on our strategy to increase our product offerings. We expect that the market will continue to receive excellent customer service augmented by AVID’s ability to deliver true custom solutions designed to meet the needs of healthcare providers, while enhancing clinicians’ abilities to access Medical Action’s extensive product portfolio.”
Medical Action has paid $62.5 million in cash, excluding transaction costs, for AVID. Medical Action expects the transaction to be accretive to earnings during the fiscal year ending March 31, 2011, excluding the impact of non-recurring acquisition related and integration costs. Medical Action also expects to achieve significant cost savings and efficiencies driven by the combination of the two companies’ national sales forces which will create broader sales channels, increased service coverage, and dedicated focus to clinical and patient care products.
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