Water Street Healthcare Partners, a private equity firm focused exclusively on healthcare, has entered into a definitive agreement to sell its gastrodiagnostic device company, Sierra Scientific Instruments, to Given Imaging.
Given Imaging, a provider of patient-friendly GI diagnostic and monitoring solutions, will purchase the business for USD35m in cash. The transaction is expected to close in early April.
Water Street was instrumental in building Sierra Scientific into a provider of diagnostic devices for the clinical gastroenterology market. The firm merged Sierra Scientific with a division of its specialty diagnostic device company, Alpine Biomed Corporation, in 2009.
Sierra Scientific offers a full suite of products that support clinicians with diagnosing a range of GI-tract disorders including gastroesophageal reflux disease, a digestive disorder that Datamonitor estimates to afflict as many as 147 million people globally.
“Sierra Scientific is a strong, well managed company respected by the GI community for its cutting-edge products which deliver reliable performance. This acquisition strengthens Given Imaging’s position as the global leader in the gastroesophageal diagnostic market. With manometry, impedance, catheter pH and Bravo wireless pH products, we advance our vision of providing total world-class solutions to our GI customers’ evolving product needs,” says Homi Shamir (pictured), president and chief executive officer, Given Imaging.
Sierra Scientific employs 175 people in Los Angeles, where it is headquartered, and in HoChiMinh City, Vietnam, where it recently opened a manufacturing facility. The company achieved revenues of approximately USD18m in 2009. Approximately 60 per cent of those revenues were from sales in the US and 40 per cent were from international sales, principally in Europe.
John Arnott, who was recruited by Water Street to lead Alpine Biomed and currently serves as chairman of Sierra Scientific, says: “It has been rewarding to play a lead role in building this organization into the market leader. The fact that Given Imaging approached us about buying Sierra Scientific to further enhance its GI solutions affirms our success in creating a company of significant value. Sierra Scientific’s customers and employees will prosper from becoming part of Given Imaging’s global network of resources and broad range of GI solutions.”
“We are pleased that two highly regarded industry leaders valued the businesses that we helped build through our original investment in Alpine Biomed. When we acquired Alpine Biomed three years ago, our vision was to build a specialty diagnostic leader. We leveraged our team’s deep health care expertise and network of industry relationships to ultimately create two market leaders in attractive segments of the health care industry. The agreement to sell Sierra Scientific to Given Imaging strategically positions the company for long-term success and delivers a solid return to our investors,” says Ned Villers, a partner with Water Street.
