GSI expects to buy a med tech OEM manufacturer for $93.5M

There's new M&A activity going on in the world of OEM medical device manufacturing. GSI Group, which makes photonics and motion control components, will buy up Jadak, a company that develops OEM components exclusively for the med tech space, for $93.5 million.

GSI, based in Bedford, MA, supplies components to the medical, industrial, electronics and scientific markets. Syracuse, NY-based Jadak develops optical data collection and machine vision tech--technology designed to help reduce medical errors and boost safety for various kinds of medical equipment--specifically for OEM (original equipment manufacturer) medical device manufacturers. The deal is a smart way for GSI to expand its med tech presence. Medical devices offer enormous room for expansion as the population ages, and GSI's CEO said it continues to focus on the med tech sector for further growth.

"With more than $170 million of GSI's pro forma revenue expected to come from the medical market, the acquisition will be a significant step for us in achieving our strategic goals," GSI CEO John Roush said in a statement.

Jadak CEO David Miller added in his own statement: "The two companies have very similar business models, customer bases and technology approaches."

Plans call for closing the deal in March 2014. GSI will finance the purchase, it said, using available cash plus funds from its $215.6 million newly amended credit facility. Once everything is finalized, GSI will be left with $140 million of gross debt and just over $100 million of net debt, a not-insignificant gamble in its med tech strategy.

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