Medical device company Steris has finalized an agreement to sell its dental segment, HuFriedyGroup, to an affiliate of Peak Rock Capital for $787.5 million. The deal also includes a potential additional earnout of up to $12.5 million based on specific revenue targets for fiscal 2025.
HuFriedyGroup: A Diverse Offering in the Dental Industry
Established in 1908, HuFriedyGroup provides a comprehensive array of instruments, infection prevention products, conscious sedation products, and management systems tailored for the dental industry. With a global presence spanning nearly 100 countries and boasting over 20 manufacturing facilities worldwide, the company has approximately 1,500 employees dedicated to serving dental professionals.
Steris intends to utilize the proceeds from this divestiture primarily to reduce its debt load. CEO Dan Carestio emphasized the company’s strategic decision-making process, stating, “We have decided to divest our Dental segment to allow us to focus on our customers within our core markets in healthcare, pharma, and medtech.” Steris acquired the dental segment as part of the Cantel acquisition and has since implemented lean manufacturing methods to enhance operational efficiency.
Transaction Details and Future Outlook
The sale, structured as an equity transaction, is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in the first quarter of fiscal 2025. Following the transaction, Steris will classify the dental segment as discontinued operations in its financial statements for the fourth quarter and the entire fiscal year 2024.
In fiscal year 2023, HuFriedyGroup reported a revenue of $407 million and an operating income of $86 million. Steris remains optimistic about the future prospects of the dental segment under the ownership and support of Peak Rock Capital.
Continuing Focus on Core Markets
Steris’ strategic move to divest its dental segment aligns with its commitment to concentrate on core markets where it can maximize the impact of its product and service offerings.
This divestiture follows Steris’ acquisition of surgical and sterilization assets from BD last year, further emphasizing its dedication to enhancing its position within the healthcare, pharmaceutical, and medical technology sectors.
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