Industrial precision manufacturer Nordson is putting down about $800 million to expand its reach into the healthcare field by buying up Atrion and its portfolio of hospital hardware spanning drug delivery and open-heart surgery.
Atrion’s main businesses include providing a variety of valves used for medication infusions through its Halkey Roberts label, including among people with cancer and those on dialysis, as well as patient safety monitoring systems and equipment for intentionally pausing the beating heart during cardiac procedures under its Quest Medical brand.
The 80-year-old Texas-based company also offers ophthalmic balloon catheters for clearing blocked tear ducts, plus other specialty inflation systems, in addition to contract manufacturing services for medical device developers through three FDA-registered facilities in the U.S.
According to Nordson, Atrion will be folded into its near $500 million medical and fluid solutions segment, which covers valves, tubing and delivery tools. On a call with investors, Nordson CEO Sundaram Nagarajan said the acquisition will increase the company’s total addressable market by more than 50%.
“The medical space is an attractive end market, supported by several secular growth drivers, including the aging population, increasing health care spending and procedure volumes, an option of minimally invasive surgical techniques and continued innovation and medical OEM outsourcing,” Nagarajan added.
The all-cash deal shakes out to $460 per Atrion share—representing a valuation of about 15 times the company’s estimated profitability for 2024, or about 20 times over its 2023 EBITDA. The price is also about a 15% premium over its 90-day stock average. The companies expect the transaction to close in the third quarter.
Atrion has recently seen post-COVID challenges with its supply chain, including shortages of computer chips, but Nordson believes those problems have largely been resolved and that synergies between the two companies could provide a small boost as they look forward to launching generational updates to Atrion’s cardiovascular systems.
Earlier this month, Atrion reported first-quarter revenues of $47.3 million, up from $40 million during the same period last year, including double-digit gains in OEM fluid delivery products and its cardiovascular systems.
“A record number of MPS 3 consoles were sold in the first quarter of this year, reflecting both strong market pull and pent-up demand now that supply chain shortages have been resolved,” Atrion President and CEO David Battat said in a statement at the time. “OEM sales for our products used in minimally invasive surgery have been negatively impacted as our customers continued to right-size their excess inventories. These customers have reported that their orders will resume to normal levels in the second half of this year.”
The company previously logged $169.3 million in annual revenue for 2023, down $14.2 million compared to 2022.