Symmetry Medical Inc. has agreed to a $450 million sale of its Original Equipment Manufacturer Solutions business to Massachusetts-based Tecomet and to transfer to Symmetry  shareholders ownership in a new company holding its Symmetry Surgical business.
Tecomet, owned by Genstar Capital, is a contract manufacturing, engineering and metal fabrication technology company based in Wilmington, Mass. Symmetry is a medical device maker focusing on surgical instruments, orthopedic implants and sterilization cases and trays.
With facilities in several states and countries, the OEM Solutions segment of Symmetry Medical provides implants, instruments and cases to orthopedic device manufacturers. It designs, develops and produces these products for companies in the arthroscopy, dental, endoscopy, laparoscopy, osteobiologic, spinal and other segments of the medical device market, as well as providing specialized products and services to the aerospace market.
Under the agreement, Symmetry will transfer its Symmetry Surgical business to its shareholders, immediately followed by the acquisition of the remaining OEM Solutions business by Tecomet for $450 million in cash, or $7.50 per share after fees and elimination of outstanding debt. Symmetry Surgical will become a newly traded public company by the end of the year, with Symmetry Medical shareholders receiving one share in the public company for every four shares of Symmetry Medical stock.
Thomas J. Sullivan, Symmetry president and CEO, said in the company’s announcement, “We are excited to reach this agreement with Tecomet, which will recognize the value of the OEM Solutions business and enhance the growth potential of Symmetry Surgical. It also provides liquidity for our shareholders along with the upside potential of Symmetry Surgical as a well-positioned, standalone company focused on the large global market for surgical instruments.”
The company notes in the announcement that the OEM Solutions business would no longer be at a competitive disadvantage due to Symmetry Medical being the only public, substantially orthopedic OEM supplier in an industry with high customer concentration.
The announcement also states that Symmetry Surgical would be able to pursue a broader surgical instrument market to optimize sales channels and cost structure without the financial limitations associated with current capital structure or potential conflicts with OEM customers.
Sullivan is also quoted as saying, “The proposed transaction has significant benefits for Symmetry Medical's OEM Solutions customers and Symmetry Surgical customers. The merger with Tecomet will create an OEM business that can provide better service based on broader and more comprehensive capabilities. As a standalone company, Symmetry Surgical will be uniquely attentive to the needs of its customers across the breadth of the surgical instrument market with a distinct clinical and health economic focus without the distraction of implant or other more regulatory demanding product lines.”