Essel Propack enters Medical Devices biz, buys 2 cos in USA

Mumbai, Mar 29 (UNI) Essel Propack Ltd has forayed into medical devices business by acquiring 85 per cent stake in two companies in USA and Singapore for a consideration of US$ 10.71 million.

The two companies being acquired by Essel Propack are Tacpro Inc, USA and Avalon Medican Services Pvt Ltd, Singapore.

Both the companies are proven players in the field of device design and development, offering over 100-plus years of collective experience in the medical device industry, according to Essel Propack Vice Chairman and Managing Director Ashok Goel.

Briefing newspersons on the acquisition, Mr Goel said ''Medical Devices arena is our new&third horizon, after laminated tubes and plastic tubes. The company's objective is to leverage its knowledge of polymers and polymer processing so as to add a new dimension to the business.'' While the acquisition offers endless opportunities and potential for growth, it is in sync with the company's knowledge and capabilities, strengths and core competence of both Essel Propack and Tacpro as well as Avalon, said Mr Goel adding: ''these three companies have huge synergies and global benchmark technology.'' He explained, ''Tacpro is a single-source solution company, while Avalon Medical Services in Singapore has an established superior manufacturing base. Some of the offerings by Tacopro are: coronary, peripheral, aortic and intracranial angioplasty catheters and guidewires; valvuloplasty, metallic and non-metallic stent delivery system; drug and radioisotope delivery; laser energy delivery; electrophysiology, thrombectomy, fertility/infertility devices and intravascular sheaths.

Replying to a question, Essel Propack's Chief Operating Officer - Global, Mr R.Chandrasekhar said ''The acquisition will be financed through some leverage funding.'' With the company's cashflow of US$ 30-35 million, this could be achieved with ease, he added.

Mr Chandrasekhar further said the acquisitions will result in a 4 per cent increase in the company's revenue during the current fiscal, while it could be around 8 per cent in the next financial year, being a full-working year.

''From whichever angle you look at it, this acquisition is an ideal fit and a perfect balance with the current businesses because of high asset turnover, low capital intensity and B2B (business-to-business) nature.'' Besides, this is a recession proof industry with a high growth area.

Figuratively, the global medical devices market size is US$ 172.6 billion. Of this, the contract manufacturing, comprises US$ 16.7 billion. The catheter market alone is about US$ 5.7 billion of which the USA has $ 2.3 billion share. The industry growth is estimated at 7-10 per cent, according to Tacpro Vice President -Engineering Mr Jeff Kraus.

Essel Propack, promoted by Essel group, with a listing on both BSE and NSE, is considered the largest speciality packaging company in the world with a state-of-the-art manufacturing facilities in 13 countries with 21 plants across the globe.

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