Arterex enters into agreement to acquire NextPhase Medical Devices

Arterex, a medical device contract manufacturer, has signed an agreement to acquire NextPhase Medical Devices for an undisclosed amount.

NextPhase is a Tier II and III medical device contract manufacturer of complex electromechanical devices, active implantable devices and single-use disposables in North America. It provides design and engineering, manufacturing and assembly, quality and regulatory, and supply chain and logistics management services that enable its customers to bring low to medium volume complex medical devices to market.

This transaction follows Investindustrial’s original investment in Arterex – created through the combination of four complementary companies in the US and Europe (October 2022) – a global multi-capability medical device contract with an industry-leading management team To make a producer.

Arterex’s acquisition of Nextphase has doubled the group’s size to become a top-tier global medical device contract manufacturer, with 70% of its revenue generated in the US. The combined group comprises seven well-capitalised end-to-end manufacturing facilities in North America, Europe and North Africa, a wide range of manufacturing capabilities and strong end-market exposure to international markets.

Arterex will be able to leverage its strong dedicated local capabilities across countries to best serve its customers, which include the majority of global medical device Original Equipment Manufacturers (OEMs).

Charles Stroup, Executive Chairman of Arterx, said: “NextPhase is an outstanding addition to the Arterx portfolio of businesses. NextPhase is well-positioned for growth and strategically, and adds measurably to the Arterex multi-capability business strategy to better serve and grow our customer base. This acquisition is transformative and provides highly complementary manufacturing and assembly capabilities to the Arterex platform. Along with the resulting capability diversification, this transaction will allow us to create significant synergies and enable us to better serve our combined core blue-chip medical OEM customer base and regional specialty customers. Our combined platform will also have substantial production capabilities in North America and Europe with a highly diversified customer base, positioning us well to continue our global growth strategy.”

The transaction builds on Investindustrial’s strong healthcare and services track record in contract manufacturing, medical devices and specialty plastics, including ProSemsa, MTD and Benvic. It also reinforces Investindustrial’s significant expertise in identifying and completing successful, value-adding buy and build transactions by completing 178 add-on acquisitions to date.

Arterex InvestIndustrial Growth III is the first investment from the fund, which focuses on majority purchases of lower middle-market companies, announced a final closing in May 2023 at €1.1 billion above its target.

The transaction is subject to customary approvals.