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Case Studies

Avalign Technologies’ Acquisition of  the Assets of Thortex

Situation Review

KGI was engaged by Avalign to execute an acquisition search assignment focused on orthopedic implants and later expanded to include instrument manufacturers in the U.S. and Europe

Avalign’s revenues are greater than $130 million with an objective to grow to $200 million prior to exit

KGI understood and appreciated the value of the proprietary Ti MIM and coating technologies at Thortex

Transaction Process

KGI had long established first-hand knowledge of Thortex and its operations developed over a period of six years, having visited the facility numerous times, and a well-established  personal relationship with ownership

Thortex was introduced to Avalign by KGI well before the Owners’ decision to sell; this allowed for quick response by Avalign when the Owners reached decision to sell based on owner’s health

Outcomes

The transaction broadened the size and scope of Avalign’s product offerings to its OEM customers

New manufacturing technology is very hard to acquire and this puts Avalign as one of three industry leaders with Ti MIM at the point of commercialization

The addition of surface coatings makes Avalign the second major contract manufacturer with such in-house capability

Medin Corporation’s Sale to Seven Point Equity Partners

Situation Review

KGI was engaged by Medin to conduct a recapitalization/sale

Existing bank debt needed to be replaced with new capital and to clean up the balance sheet after the business moved to a new facility

The majority owner desired to continue to focus on sales and marketing aspects of the business leaving operations to new management

Transaction Process

KGI worked with ownership and marketed the business to strategic industry buyers, debt funds and specialized financial buyers

Five offers were received followed by management meetings and LOIs

Ownership closed a deal with a buyer who offered a recapitalization of the balance sheet, new equity and had a risk profile that matched the business

Outcome

The majority owner remains active in the business with responsibilities for strategic partnerships with customers and vendors

Ownership significantly reduced their personal financial exposure while new capital and management has entered the business to position it for the future

Opportunities for equity appreciation tied to performance allow for future financial gain by ownership

Onyx Medical’s Sale to Elos Meditech

Situation Review

KGI was engaged by Onyx to conduct a negotiated sale process.

The two active shareholders desired a partner who could provide capital to fuel business growth beyond the limits of organic growth or through marginal debt and equity infusions.

The two inactive shareholders were at retirement age and wanted to obtain liquidity from their investment.

Transaction Process

KGI prepared a Confidential Information Memorandum and marketed selectively to certain family offices and strategic acquirers.

A number of offers were received followed by management meetings and a fully negotiated LOI.

The Shareholders closed a deal with the buyer who offered the best combination of economic, cultural and strategic fits.

Outcome

The Sellers active in the business will remain in place and assume additional duties consistent with the global footprint Elos

Deal negotiation and due diligence allowed Sellers and Elos to establish a rapport and mutual respect leading to the closing of a deal which had seemingly insurmountable issues at points during the negotiation

Onyx will operate as a business unit within the Elos group and serve as a platform for expansion within the U.S.

Southeastern Technology’s Sale to Autocam Medical

Situation Review

KGI was engaged by SET to conduct a negotiated sale process.

Shareholders were motivated to sell by the length of their investment, ongoing lack of liquidity, strong operating results of the Company, and strong investment market factors favoring a transaction at this time.

Transaction Process

KGI prepared a Confidential Information Memorandum and contacted ~200 prospective buyers.

Five offers were submitted and management meetings were conducted with select prospects.

The Shareholders closed a deal with the buyer who offered the best combination of economic, cultural and strategic fits.

Outcome

Intense negotiations resulted in an excellent outcome for the Client.

SET will operate under Autocam as the Southeastern Technology division

Tecomet’s Acquisition of Teleflex, Inc.’s Ortho Business

Situation Review

KGI was engaged by Tecomet to conduct a very tightly focused acquisition search.

Transaction Process

The OEM business was not marketed for sale but rather was developed through KGI’s knowledge of and network in the medical device contract manufacturing sector.

KGI was instrumental in identifying the opportunity and providing access to senior management of Teleflex.

Outcome

The transaction broadened the size and scope of Tecomet’s product offerings to its markets.

Beere Medical® offers one of the world’s largest collections of custom surgical instruments used for orthopedic and spinal procedures.

SMD® is a market leader in micro-machined products ranging from simple components to complex devices.

Squadron Capital’s Acquisition of Structure Medical

Situation Review

KGI was engaged by Squadron to execute an acquisition search assignment focused on precision machining, primarily of medical devices .

Transaction Process

Structure Medical was not marketed for sale but rather was developed through KGI’s knowledge of and contacts in the medical device contract manufacturing sector.

KGI negotiated major terms of the LOI which was executed by the parties and led to negotiation and execution of a definitive agreement.

Outcome

Squadron was one of six active suitors.

Aggressive, persistent and persuasive negotiating by KGI led to a successful transaction closing.

Direct Medical Data’s Sale to Aptilon Holdings Inc.

Situation Review

The Partners acquired the non-performing data processing division of Acxiom Corp. and grew revenues from $1.5 million to $9.2 over 7 years.

KGI was engaged to create liquidity for the Partners so two of the three could retire

Transaction Process

KGI prepared a Confidential Information Memorandum and contacted over 100 prospective buyers.

A dozen offers were submitted and management meetings were conducted with select prospects.

The Partners ultimately closed a deal with the buyer who offered the best combination of economic, cultural and strategic fits.

Outcome

Intense negotiations resulted in an extraordinary outcome for the Client.

The Company continues to operate under Aptilon Holdings

Grindmaster’s Sale to Cecilware Corp.

Situation Review

KGI was engaged by Grindmaster to conduct a negotiated sale process.

In the year to prior to engagement the Company was at breakeven and had generated losses in the prior four years

Transaction Process

KGI prepared a Confidential Information Memorandum based on its “marginal contribution” model.

An intense marketing effort was deployed focused on strategic buyers only

Outcome

KGI generated five indications of interest &/or term sheets.

The combined companies are now known as Grindmaster-Cecilware

CM Packaging’s Sale of a Division to American Pan

Situation Review

KGI was engaged by CM Packaging to conduct a very targeted sale process for a division that was outside its current strategic direction.

The Division was under-performing and generated pre-tax income of only $1.4 million in the year prior to sale.

Transaction Process

Using its knowledge of potential threats from Asia to the Industry’s profit base, KGI rapidly identified buyers most likely to gain from capture of a competitor’s revenue.

A compelling sale document was prepared and presented to a handful of the Industry’s top players.

Outcome

Intense negotiations resulted in an extraordinary outcome for the Client.

The Division’s products are now sold under the Bundy American Pan umbrella as the “Chicago Metallic” brand.

Client subsequently engaged KGI for an acquisition initiative that resulted in multiple successful transactions.

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