Cantel Medical Corp will acquire Hu-Friedy Mfg Co for $725 million in upfront cash and stock consideration and up to $50 million in earnout payments payable in cash and stock conditional on the achievement of commercial milestones in the first 18 months after closing.
According to the companies, the deal will create a provider of comprehensive infection prevention, instrument, and instrument management solutions to optimize clinicians’ need for superior clinical performance and best in class infection prevention practices.
“The combination of our two dental businesses provides a clear and immediate opportunity to become the leading provider of a ‘Complete Circle of Protection’ offering for instrument reprocessing workflow and infection prevention and compliance solutions in the dental industry,” said George Fotiades, president and CEO of Cantel.
“By bringing together our highly complementary dental portfolios, we will create a business that is uniquely positioned to address the most critical workflow needs of our customers while improving patient care,” said Fotiades.
“As a leader in dental instrumentation and instrument management solutions, Hu-Friedy’s combination with the Cantel portfolio of leading infection prevention dental consumables is a perfect match to further enhance our ability to serve our dental customers,” said Ron Saslow, chairman and CEO of Hu-Friedy.
In the 12-month period ending on May 31, 2019, Hu-Friedy generated about $214 million in revenue. It has a 90% branded portfolio and enjoys nearly 100% brand awareness among dentists and hygienists, the companies report.
Saslow and Hu-Friedy president Ken Serota will lead the combined dental business after the acquisition is finalized. Gary Steinberg, who has built Cantel’s dental division since its acquisition of Crosstex, will assist in the integration and retire at the end of 2019.
Cantel plans on integrating Crosstex’s infection prevention consumables with Hu-Friedy’s IMS product offering in new and existing IMS users. Also, Hu-Friedy’s presence in dental and hygiene schools is an opportunity to cross-sell Cantel consumables, the companies say.
The boards of directors of both companies have approved the transaction, which is expected to close in the first quarter of Cantel’s fiscal year 2020, subject to regulatory approvals and other customary closing conditions.