Outsourced product design specialist TE Connectivity ($TEL) will increase its focus on medical devices with its $190 million purchase of catheter player AdvancedCath. The purchase is intended to tap into what the company sees as a growing medical device market by further fleshing out its TE Medical business capabilities, which includes the design and manufacture of connectors, sensors and components for use in med tech applications.
AdvancedCath also provides development and manufacturing services, but specifically for catheter and guidewire systems to be used in medical devices. It estimates 2015 revenues of $60 million.
"The combination of TE's connectivity and sensor solutions with AdvancedCath's expertise in the medical device market provides customers with an unmatched set of capabilities and technologies that enable future innovations and medical advances," Terrence Curtin, president of the TE Connectivity Industrial Solutions segment said in a statement. TE's Medical business is part of its Industrial Solutions segment.
The deal is expected to close in late March and should supplement TE's access to the outsourced manufacturing market for interventional devices, which it pegs as growing 10% a year.
TE has a $29 billion market valuation. During the most recent quarter, Industrial Solutions accounted for $784 million out of a total of $3.5 billion in net sales. That's an increase of almost 3% for that segment's sales over the same quarter a year prior. The remainder of TE's sales come from Transportation Solutions, Network Solutions and Consumer Solutions segments.
"We can now offer customers an unmatched combination of sensor, material science, electrical and biomedical technologies and a single source of manufacturing expertise for advanced medical devices," Randall Sword, CEO of AdvancedCath, said in a statement. "With TE's geographic footprint, we can provide better support to our global customers as they progress through development, clinical trials and volume manufacturing."
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