Client’s growth strategy

Our Europe based Client came to Kinsella Group to utilize our expertise and focus in the MedTech and life sciences markets to grow their business. Our Client had extensive experience in precision machining as it related to parts utilized in the manufacture of traditional surgical instruments.

This Client’s acquisition growth strategy included three objectives:

(1) Establish a North American manufacturing presence.

(2) Capitalize on the increasing use of minimally invasive surgical (MIS) procedures.

(3) Grow EBITDA at a rate faster than revenue by producing higher margin products.

Our Client’s existing capabilities included milling, EDM, Swiss machining and turning.  Their initial thought was to duplicate these capabilities and fill capacity by promoting their international presence through a newly established sales force.  Challenges of expanding through organic efforts were hindered by a lack of a presence in the US market and a sales force not having solid relationships with decision makers of OEMs in the lucrative MIS market.

The Kinsella Group approach

After initiation of the search process and introduction of targets to Client, it began to be clear that capabilities of an acquisition target were important but of greater interest were acquisition targets with customers in the MIS space.

We expanded our search beyond targets focused solely on medical end markets and sought those with solid relationships in the MIS community despite other end market activity. We shifted from a capabilities’ focus to a served customer/end market focus.

We refocused our search efforts to identify targets with a presence in the MIS end markets though less than a 100% on medical, to expand the suspect pool. We developed a target with  60% medical and 40% defense with established business with a major MIS OEM. Client based his decision to acquire on the target’s relationship with the MIS OEM.

The acquisition was completed successfully and our Client went about penetrating the MIS customer to enjoy increased profits from the high margin MIS products.

Beyond listening 

Our shift from capabilities to customers in the search process was successful for our Client who has contacted us to discuss re-engagement on a new search assignment.

About the Author

Daniel J. Greene has been successfully operating and advising businesses for over two decades. Expertise and experience includes acquisitions, financial performance improvements, capital structuring and post-merger integration.