Cantel Medical to acquire dental device maker Hu-Friedy for $775M

Cantel Medical announced plans to buy Hu-Friedy Manufacturing, a longtime maker of dental instruments and reprocessing equipment, in a $775 million acquisition.  

The deal will help build out a portfolio of infection prevention solutions including consumables, instrumentation and workflow management programs for dental practitioners while also complementing Cantel’s previous device reprocessing offerings in both the medical and dental spaces.

Founded in Chicago in 1908, Hu-Friedy will be acquired for $725 million upfront in a combination of cash and stock with up to $50 million more based on commercial milestones met in the 18 months after closing. In addition, Cantel said the deal’s structure could result in tax benefits of at least $100 million for the combined company.

"The combination of our two dental businesses provides a clear and immediate opportunity to become the leading provider of a 'Complete Circle of Protection' offering for instrument reprocessing workflow and infection prevention and compliance solutions in the dental industry," Cantel President and CEO George Fotiades said in a statement. 

"Hu-Friedy brings us the scale, commercial capabilities and portfolio breadth to enable our dental business to be a significant driver of long-term profitable growth for Cantel," Fotiades added. 

For the 12-month period ending May 31, Hu-Friedy brought in about $214 million in revenue. The privately held company also brings a large sales and marketing team to the table, according to Cantel, to help drive future expansions into the dental industry—and its education and training presence in dental schools will provide a new avenue as well.

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Hu-Friedy Chairman and CEO Ron Saslow and President Ken Serota will lead the combined dental business going forward. Meanwhile, Cantel’s dental head, Gary Steinberg, will assist in the transition and integration before retiring at the end of the year. 

Steinberg previously helped build out Cantel’s dental division following its acquisitions of Crosstex, maker of healthcare disposables, and the nitrous oxide equipment manufacturer Accutron.

Following the Hu-Friedy acquisition, Cantel plans to integrate Crosstex's infection prevention consumables into Hu-Friedy's instrument management system offerings for both new and existing customers. 

The transaction has been approved by the boards of directors of both companies and is expected to close in the first quarter of Cantel's 2020 fiscal year.