Steris ($STE) is putting $110 million into some consolidation, this week buying up two companies that specialize in repairing surgical devices to augment its existing business.
Spectrum Surgical Instruments and Total Repair Express provide surgical tech repair services to hospitals and surgery centers, and Steris says the two operations are projected to pull in a combined $72 million in revenue this year. CEO Walt Rosebrough said folding the two companies into Steris' Specialty Services business will help it snag more hospital clients.
"These bolt-on acquisitions will give Steris one of the largest surgical instrument repair businesses in the United States, and we are excited about the opportunity to leverage our existing customer relationships to grow these businesses throughout the country," Rosebrough said in a statement.
As hospitals around the country look to cut costs, they're outsourcing surgical instrument repair at a pace of about $500 million a year in the U.S., Steris says. That industry is fractured among local providers across the map, however, and Steris is betting that its consolidated offering will give it a leg up on other contractors.
The two deals follow Steris' July agreement to buy U.S. Endoscopy for $270 million in cash, expected to close next year. Despite its name, U.S. Endoscopy doesn't make endoscopes, instead producing components attached to the end of them, including retrievers, grasping devices and suction tubes.
- read Steris' release