UFP to buy device component maker AQF Medical, extending deal spree
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Dive Brief:
UFP Technologies has agreed to buy medtech component manufacturer AQF Medical for 43 million euros ($48 million), UFP said Monday in a securities filing.
AQF, based in Navan, Ireland, develops and manufactures custom-engineered foam and thermoplastic components used in medical devices and packaging. UFP makes single-use devices and sterile packaging.
Keybanc Capital Markets analysts said in a note to investors the acquisition will likely add complementary capabilities and scale to UFP's portfolio and support its expansion outside the U.S.
Dive Insight:
Newburyport, Massachusetts-based UFP has expanded through acquisitions in recent years. From October 2021 to March 2022, the company bought Advant Medical, DAS Medical and Contech Medical for nearly $100 million in total. Having sold its Molded Fiber Technology subsidiary in July 2022, UFP embarked on another round of takeovers this year.
The company completed the acquisitions of Marble Medical, AJR Enterprises and Welch Fluorocarbon between June 24 and July 15. UFP said buying the companies will add an estimated $90 million in sales and expand its capabilities in medical stick-to-skin adhesives, specialty fabrics and implant materials.
Keybanc analysts discussed three areas of overlap between UFP and its latest acquisition, AQF. The two companies work on: specialty thermoplastic polyurethane products such as orthopedics packaging and surgical equipment covers, including robotics; polyurethane foam for negative pressure wound therapy; and antiseptic applicators for skin prep.
The analysts said the valuation is slightly higher than UFP’s historical deal average but “appears reasonable based on the available information.”
UFP CEO R. Jeffrey Bailly said AQF brings expertise in converting specialty foams and films, an expanded European manufacturing presence that clients have requested and a joint venture facility in Singapore.
The companies share numerous clients, the CEO said, and have served similar segments and applications for years. The overlap gives UFP “a deep understanding” of AQF’s processes and materials, Bailly said in a statement.
Seamus Fagan, managing director at AQF, said his company’s local knowledge could help UFP to identify new clients in Asia and Europe.