Investment Approach

Case Study : Phillips-Medisize Corporation

The transformation of Phillips-Medisize from a diversified domestic contract manufacturer into a premier global outsourced medical device manufacturer required a unique combination of strategic vision and execution acumen. Kohlberg provided a steady, experienced hand in helping us craft and implement our plan, and proved to be an invaluable business-building partner to me and my entire leadership team. "

Matt Jennings - Chief Executive Officer
Company Description:

Phillips-Medisize Corporation (“Phillips”) is a leading designer and manufacturer of highly engineered finished devices, sub-assemblies, and components that are primarily developed and manufactured for medical end market applications. Phillips offers a broad range of pre-production and production services that enable the Company to partner with its customers throughout all stages of the product lifecycle – from product design, engineering, and prototyping through injection-molded manufacturing, supply chain management, and post-molding finishing services.


Compelling Situation:

  • Kohlberg acquired the Company from a founder who had built a business with leading engineering and manufacturing capabilities but without a coherent product, customer or market strategy


Kohlberg Actions:

  • Built new management team, led by new CEO Matt Jennings, focused on driving expansion of core medical device capabilities while rationalizing non-core manufacturing processes
  • Kohlberg Operating Partner Jack Rohrbach supported management on strategic plan development, including acquisition identification, execution and integration
  • Leveraged product development expertise to target the attractive and backlog-driven medical device and drug delivery end markets
  • Established capabilities as a global medical device manufacturing partner through acquisition of Medisize (Europe) and several facilities from AdvalTech (manufacturing in China and Mexico)


Results

  • Grew medical device related EBITDA from 50% at time of the acquisition to 80% at time of exit
  • Through building a global operating platform (added Europe, Asia and Mexico facilities) with superior manufacturing capabilities (added high volume manufacturing capabilities and disposable products), Phillips-Medisize was able to penetrate significant new share of its medical device customers’ global needs
  • Transformation into medical device pure-play with global manufacturing and record backlog led to accelerated value creation and ultimately significant multiple expansion on exit




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Photography courtesy of C. Bernstein & MGF