A nearly $1 billion ICU Medical Inc. (Nasdaq: ICUI) acquisition last year is paying immediate dividends for the San Clemente-based maker of medical technologies used in vascular therapy.
The company completed its largest-ever acquisition early last year, buying Hospira Infusion Systems from Pfizer Inc. (NUSE: PFE).
Hospira makes I.V. solutions and pumps that infuse fluids and medication into a patient’s circulatory system.
The acquisition was initially projected to cost ICU $1 billion, but the stock-and-cash deal eventually closed for about $900 million, according to news reports.
“2017 was a very unique year for ICU Medical,” Chief Executive Vivek Jain said during a call with analysts this year, noting that Hospira was “a company four times larger than us.”
The deal resulted in a company projected to post revenue of about $1.2 billion, well above ICU’s revenue of $375 million prior to the transaction, according to investor presentation slides detailing the purchase.
It also brought employment to 9,000 worldwide.
The sales gains actually exceeded expectations, based on data used to rank this week’s fastest-growing public companies list, topped by ICU in the large category. The company posted more than $1.4 billion in sales for the 12-month period ended June 30, up 300% in two years.
Along with the sales gains, ICU increased OC employment 41% compared to a year earlier. It now has about 250 people in San Clemente, where it owns a 39,000-square-foot building and leases a 20,000-square-foot facility nearby.
The company’s market capitalization was about $5.3 billion as of press time. Shares are up about 35% from a year ago, and its stock price has nearly doubled since the Hospira deal was announced.
Smooth Sailing
Jain pointed out on the company’s most recent earnings call in August that the second quarter marked the first complete year-over-year quarterly comparison period of owning Hospira.
While ICU continues to integrate the company, the second quarter “was probably the cleanest quarter we’ve had since owning Hospira, as almost all the transactional noise is starting to get behind us,” he said.
ICU is scheduled to report third-quarter earnings on Nov. 8. It didn’t return phone calls or email inquiries for comment last week.
Pure-Play
ICU’s purchase of Hospira wasn’t a play to diversify its portfolio, but a maneuver to bring complementary product portfolios in-house, executives said previously.
ICU, whose legacy portfolio includes infusion therapy, oncology infusion products, and critical care, has worked with Hospira for over 20 years.
The addition of a company whose portfolio complements ICU’s existing business results in “a company with a complete I.V. therapy product portfolio from solutions to pumps to non-dedicated infusion set,” according to a company statement.
The resulting vertically integrated supplier also gained additional distribution channels and “significantly enhanced global footprint and platform for continued competiveness and long-term growth,” it said.
Growth
Jain said a year into integrating Hospira that the company has “all the pieces, all the technology and all the scale to compete globally.”
The company said it’s investing heavily in the U.S. to increase domestic capacity. It owns nearly a million square feet of manufacturing space in Austin, Texas, and Salt Lake City, and several hundred thousand square feet of distribution space across the country, including a location in Santa Fe Springs.
