OCTOBER 6, 2005
FOR IMMEDIATE RELEASE
Decosimo Corporate Finance (DCF) announced today the closing of a strategic sale valued at $50 million.
Machining Technology Group, LLC acquired by Accellent, Inc.
Machining Technology Group, LLP ("MTG") provides development, engineering, rapid prototyping and manufacturing of specialized instruments for the world's major orthopedic medical device companies.Transaction Snapshot: DCF structured a confidential marketing process to target private equity firms that fit both MTG's profile and its owners' objectives. In view of recent industry developments pointed out by DCF, the owners decided to add a few select strategic buyers to the process. On October 6, 2005, MTG was sold to Accellent, Inc., a leading provider of integrated contract manufacturing and design services to the medical device industry. This transaction value of over $50 million represents a multiple of 7.6x MTG's projected 2005 EBITDA.
Seizing an Opportunity
MTG's owners engaged DCF to value the company for general corporate planning, including updating their key man life insurance. While delivering its valuation, DCF presented the idea of a private equity recapitalization both to achieve personal liquidity and diversification and to best position MTG to meet the demands of a soaring market for spinal devices.
MTG faced the challenges of over 90% customer concentration and a growing need for capital expenditures. DCF helped articulate and present a compelling story of the company's strengths and opportunities to potential investors.
Having received indications of interest from several financial and strategic buyers, DCF arranged visits with the top prospects. After helping MTG's owners weigh the pros and cons of a strategic vs. financial transaction, DCF negotiated a transaction price that more than doubled management's original expectations.
In addition to $33 million cash and a significant amount of Accellent preferred stock, the owners gained key executive positions at Accellent, provided job security and professional growth opportunities for MTG employees and positioned MTG as a key component in Accellent's plans to rapidly grow its orthopedic division.
On October 10, 2005 Accellent announced that it had agreed to be acquired for $1.27 billion by Kohlberg Kravis Roberts & Co., one of the world's oldest and most experienced private equity firms. This subsequent transaction will further enhance Accellent's strength and significantly increase the value of the MTG owners' preferred stock.