Jul 09, 2023

Q Holding sells Precision Components business to Cirtec Medical Corp.

BROOKLYN PARK, Minn.—Cirtec Medical Corp. has acquired the QMD Precision Components business of Q Holding, bringing the Brooklyn Park-based business capabilities in a number of rubber product areas.

The sale of the QMD unit is the third sale of a Q Holding business since last April by 3i Group P.L.C., the private equity firm that has owned the Twinsburg, Ohio-based rubber product maker since 2014.

Cirtec calls itself a "strategic outsourcing partner of complex medical devices, including minimally invasive and active implantable devices."

The firm said in a Jan. 30 news release that QMD's Precision Components unit specializes in the development and manufacturing of silicone, polyisoprene and other custom elastomeric components, tubing and subassemblies.

The business consists of Centers of Excellence in Sturtevant, Wis., and Rock Hill, S.C. Cirtec said the engineering and manufacturing capabilities will remain at the facilities, along with current leadership.

"This acquisition is a natural fit for us and will open new doors for customers through advanced expertise in medical silicone molding and extrusion," Cirtec CEO Brian Highley said in the release. "From materials science and mold development through manufacturing and assembly, QMD Precision Components will enable Cirtec to provide customers with new and powerful capabilities as a full-service outsource partner."

Highley added that also will strengthen his firm's growth opportunities in such existing markets as active implantables, interventional and minimally invasive surgical devices.

The Precision Components business will be integrated into the Cirtec brand, offering the new owner integrated solutions "based on decades of silicone experience."

Cirtec said it provides end-to-end product design, development and manufacturing of Class III and II medical devices and components. It specializes in such technologies as neuromodulation, implantable drug delivery, cardiac rhythm management, ventricular assist, and interventional devices and delivery systems.

"The combination of Cirtec and QMD Precision Components creates one of the world's most comprehensive set of capabilities in Medical Device Outsourcing today," QMD CEO Mauricio Arellano said, "translating into extremely exciting opportunities for the benefit of our customers, our associates and most importantly, the patients we all have the privilege of serving."

Besides the facilities it is acquiring from QMD, Cirtec's global footprint includes plants in Brooklyn Park; Chandler, Ariz.; Enfield, Conn.; Los Gatos, Calif; Lowell, Mass.; El Coyol, Costa Rica; and Birkenfield, Germany.

Since buying the then-named QSR and QMD businesses and forming Q Holding in 2014, 3i said it has supported the acquisitions of Degania Medical and Silicone Altimex, along with expanding Q's global manufacturing footprint with new facilities in Mexico, and supporting investments in Europe, China and India.

But since last April, the London-based private equity firm has begun selling off Q Holding assets. The first deal was the sale of the QSR Division, a developer and manufacturer of electrical connector seals, to Altdorf, Switzerland-based Datwyler Holding A.G. for $625 million.

Proceeds of that sale were used to retire the Q loan facility and "return substantial capital to 3i and other investors," 3i said in a news release at the time.

Based in Pepper Pike, Ohio, QSR operated five production plants across the U.S., Mexico and China, and employs 1,250 people. It generated sales of $164 million in 2021.

That was followed in December by the divestment of Q Holding's Medical Elastomer Development Inc. unit to Sanisure, a vertically integrated player in the single-use bioprocessing technology space. MED also was part of Q Holding's Precision Components unit and operated a state-of-the-art silicone extrusion facility in Twinsburg, serving customers in the medical device and bioprocessing markets.

While it didn't break down the terms of the sales to Sanisure and Cirtec, 3i said in a Jan. 31 news release that combined proceeds of the two deals are expected to be $172 million. It said the deals were expected to be completed in the first quarter, as they are subject to customary antitrust approvals.

"We are proud to have partnered with Q's leadership team to grow Precision Components into a leading global manufacturer of highly-engineered medical device components," Richard Relyea, a partner with 3i, said in a statement. "These transactions will enable the continued strong growth of the Precision Components operations, aligning them with highly complementary companies and teams that bring additional capabilities and enhanced solutions that will benefit their customers and patients."

Following the transactions, Q Holding will consist of its Catheter Technologies segment, which comprises the Degania, Arthesys and Biometrix brands that serve the medical device market with a wide range of catheter products. Catheter Technologies supplies global OEMs with catheter products for the cardiovascular, vascular, enteral feeding, urology and general surgery markets. The segment has facilities in Israel, France, India and Slovakia.

Relyea said 3i looks forward to continuing to work with the Catheter Technologies team to achieve its growth initiatives.

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