May 26, 2010
Gainesville, Fla. – Orthopedic implant manufacturer Exactech Inc. has acquired its sole supplier of the direct compression-molded polyethylene bearings used in its Optetrak-brand knee replacement system.
“Protecting this proprietary technology is of critical importance to our knee product line,” said David Petty, president of Gainesville, Fla.-based Exactech. In 2009, Optetrak accounted for $75 million — or nearly 43 percent — of Exactech’s $177 million in total revenue.
Exactech develops and manufactures bone and joint restoration products for the hip, knee, shoulder and spine.
The all-cash $5.5 million acquisition of Brighton Partners Inc., announced May 25, includes its assets, its technology, its workforce and Brighton’s manufacturing plant in Sarasota.
“The acquisition provides structure and resources for production expansion to support our worldwide growth,” Petty said.
Exactech said the polyethylene bearings are a key factor in knee implant longevity because they provide a smooth, gliding surface between the metal components that are used to replace the damaged ends of a patient’s thigh and shin bones.
Albert Burstein, majority owner of Brighton Partners, called the acquisition “a logical step in assuring continual development and growth in Exactech’s knee product line.” Burstein was the lead design engineer for the Optetrak knee implant and developed the process for manufacturing the direct compression-molded polyethylene bearings.
In April, Exactech acquired the hip endoprosthesis business assets of Tantum AG, a German importer and distributor of orthopedic products and surgical supplies. It also received approval to market its Novation-brand hip replacement system in Japan, where it has marketed its knee replacement system the past decade.
According to a report from Millennium Research Group in November 2009, Japan has the largest proportion of people over age 65 in the world, and will continue to be a source of steady revenues in the large-joint reconstructive implant market. Hip replacements outnumber knee replacements in Japan.
In the first quarter, Exactech’s revenues in the first quarter increased 13 percent to $49.1 million from the comparable period a year ago, and its net income rose 33 percent from $1.9 million to $2.5 million.
The company said revenue from knee implants increased 13 percent to $20.9 million, hip implant revenue increased 1 percent to $6.6 million and biologic and spine revenue increased 4 percent to $7.4 million.
In addition, revenue from extremity implants rose 22 percent to $7.1 million as a result of the continued market penetration of its shoulder product, the company said.
“We are benefiting from consistent focus and expansion in several international markets,” Petty said. The company’s international revenue increased 30 percent from the first quarter a year ago to $16.3 million, primarily due to knee product sales, he said. That boosted international sales to 33 percent of sales, compared to 29 percent in the first quarter of 2009.
Sales in the U.S. rose 7 percent to $32.8 million, up from $30.8 million a year ago.
Exactech said its revenue target for 2010 is between $190 million and $197 million.
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