Summit Medical
Transaction Background
In September 2001 Graphite Capital led the £17 million buy-in/buy-out of Summit Medical from its founding shareholders. Summit designs, manufactures and distributes medical devices and accessories. The owner-manager wished to realise his shareholding and step back from managing the business. We introduced a buy-in CEO who led the transaction with the incumbent management team. The owner-manager was keen to retain exposure to Summit’s ongoing growth potential and rolled over a small part of his proceeds for a shareholding in the buy-out structure. He retains an on-going involvement in the business as a non-executive director.
Deal Attractions
Summit Medical has a portfolio of successful and profitable products, many of them with strong patent protection. The company focuses on creating and selling medical devices which deliver clinical and economic advantages to patients and medical practitioners. It has defensible positions and high market shares in niche medical segments. It had already proven its products’ export potential, including in North America. We were attracted by the potential for further growth from increased new product development, additional export sales and through Summit’s specialist salesforce and distribution capability in the UK.
Achievements
- a buy-in CEO was successfully brought into lead the incumbent management team
- the business grew rapidly with revenue and profit more than doubling
- Summit developed and launched a series of new products to significantly extend its core product range. Strong organic growth in export sales was also achieved, notably in North America
- two bolt-on acquisitions were completed (in 2003 and 2006) to give the group positions in related but new market segments
- in 2005 a bank refinancing enabled Graphite to recoup its original investment, facilitating an extended holding period as the group achieved further growth
Exit
- in April 2008 the group was sold to The Riverside Company for £36 million in a secondary buyout transaction
- Graphite generated a return of 3.2 times the cost of its investment and the management team realised a significant proportion of their shareholding
- Summit was an attractive target for Riverside given the breadth of its proven product range across its three separate business units and its further growth potential notably in export markets
