An eye on visualisation

UK-based surgical technology specialist Gyrus Group is set to double in size following news that it plans to buy US medical device company ACMI for £275m.

Gyrus — whose key customers are ear, nose and throat surgeons, gynaecologists and urologists — will look to capitalise on ACMI’s work in visualisation software and its 40 per cent hold on the US urological endoscope market, worth an estimated £110m a year.

The company said the deal would increase its product range in gynaecology and urology, and provide a platform to expand into general surgery.

In May ACMI, which is controlled by US private equity firm Fox Paine, claimed to have developed the world’s smallest digital camera and video sensor, a combination that is smaller than a matchstick, which will be incorporated into advanced endoscopic medical devices. ACMI was also the first company to develop digital endoscopes.

This is the third time that Gyrus has doubled in size. In 2000 the company acquired of US-based Everest Medical. Then the following year the group entered the head and neck surgery market by simultaneously acquiring the ENT division of Smith & Nephew and Somnus Medical Technologies.

According to chairman Brian Steer, this latest deal makes Gyrus the second-biggest medical technology company listed on the Stock Market.

‘This is a very significant acquisition for us,’ said Steer. ‘It transforms us into a worldwide leader in keyhole surgery, particularly in our respective sectors of the market.’

Herald Chen, chief executive of ACMI, said the buyout will benefit the US business’s position in the medical devices market. ‘The transaction with Gyrus will enable ACMI to expand its strong market position and develop exciting new technologies in and beyond the urology and gynaecological practice areas.’

Gyrus expects the savings from the merger to add £12.2m to pretax earnings within three years. ‘The combination of our two international infrastructures will allow us to grow faster,’ said Steer. Gyrus is financing the deal by raising £116m through issuing new shares and a debt facility with the Royal Bank of Scotland. It will also issue a further £34.3m of new shares to Fox Paine as part payment.