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Avalign Technologies’ Acquisition of  the Assets of Thortex

Transaction Details

Client: Avalign Technologies is a Bannockburn, Illinois-based medtech contract manufacturer selling instruments, cutting tools and cases and trays to mid-range orthopedic OEM customers
Ownership: Avalign is a portfolio company of Washington D.C.-based Arlington Capital Partners
Seller: Thortex is a Portland, Oregon-based manufacturer of metal machined orthopedic  implants, a proprietary coating process for implants and patented titanium metal injection molding (Ti MIM) manufacturing technology
Transaction: Avalign acquired 100% of the assets of Thortex
Consideration: Cash plus earn-out
Valuation: Undisclosed

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