Onyx ($ONXX), a South Dakota manufacturer of medical devices, will soon be part of Sparton Corporation, as the industrial devicemaker has inked a deal to buy the company for $43.25 million in cash.
Onyx specializes in the contract manufacturing of medical devices and components, and the company recently expanded to Minneapolis to get closer to a hub of industry clients. Onyx churns out products for cardiovascular diagnostics, hearing assistance, point-of-care diagnostics and surgical equipment, and Sparton said the acquisition will give it a strong presence in Minneapolis' expanding medical device market.
Furthermore, Sparton's global device manufacturing capabilities will help entice more med tech clients, CEO Cary Wood said. "Onyx brings solid, long-term customer relationships that will utilize Sparton's expanded list of service offerings, such as our low-cost country footprint in Vietnam and full engineering design capabilities," Wood said in a statement.
Sparton plans to keep Onyx's management on board once the deal closes, and the corporation believes the Onyx buy will contribute about $50 million to its annual revenue.
This big bet on contract device manufacturing comes as industry giants--including Minnesota outfits such as St. Jude Medical ($STJ) and Medtronic ($MDT)--are cutting costs and trimming payroll. The resultant penny-pinching could find devicemakers scaling back their in-house manufacturing and relying instead on cost-efficient contractors, setting the stage for the bloom Sparton expects.
- here's the release