Manufacturer offloads American division in multi-million pound deal
MANUFACTURER Fenner has disposed of a US asset to focus on the growth of its newest acquisitions.
The company is disposing of Xeridiem Medical Devices, Inc in a deal worth $10.5m (£7.91m) to PPC Industries.
Xeridiem is a manufacturer of minimally-invasive catheters and other single-use medical devices located in Tucson, Arizona, USA.
Fenner acquired the business in late 2010, and the proceeds of the sale will initially be used to reduce Fenner’s net indebtedness.
For the year to 31 August 2015, Xeridiem achieved an operating profit of $200,000 before certain non-recurring items and had gross assets of approximately $3.2m.
The Hessle-based manufacturer, which is refocusing its business towards medical manufacturing, was previously heavily invested in the US coal industry.
It faced deteriorating markets in that sector and is now refocusing on its other medical manufacturing businesses following the acquisitions of Charter and Secant Medical in 2015 and 2016.
It announced less than a year ago that it would not meet expectations after a drop in revenues and profits.
Fenner’s underlying pre-tax profits were down 35% to £42.5m, but restructuring costs of £9.9m along with impairment costs of £24.5m and finance costs of £14.4m dragged the company’s results into the red.
Mark Abrahams, chief executive of Fenner PLC, commented:”Fenner has recently invested significantly in its medical businesses, most particularly through the acquisition of Charter Medical in January 2015 and the construction of state of the art, purpose-built facilities for Secant Medical, which have now entered the testing and certification phases.
“Together, these businesses provide a platform for exploiting our knowhow in new and growing fields to support our customers’ ambitious growth plans.
“We believe Xeridiem will bring more synergies to the acquirer whilst the mutually beneficial deal will allow us to focus on the significant growth opportunities in Secant and Charter.”
