LONDON: Creo Medical Group plc (AIM: CREO) has entered into a binding agreement with Micro-Tech (NL) International B.V., a subsidiary of Micro-Tech (Nanjing) Co. Ltd. The agreement involves the sale of 51% of the issued share capital of Creo Medical S.L.U. (Creo Europe) at an equity value of €72 million on a cash-free, debt-free basis.
The net proceeds from this sale, estimated at approximately €30 million, will bolster Creo Medical Group’s balance sheet, allowing continued investment in its core businesses, Creo and Kamaptive.
This financial boost will support the company’s commercial and operational goals. For the fiscal year ending December 31, 2023, Creo Europe reported profits before tax of €3.6 million and net assets of €8.8 million, excluding cash balances.
Acquired in 2020, Creo Europe (formerly Albyn Medical S.L.) has been pivotal in expanding Creo Medical Group’s commercial footprint in Europe. The acquisition provided a direct route-to-market for Creo’s advanced energy devices and enhanced the company’s OEM strategy, ensuring long-term supply chain security.
Since its acquisition, Creo Europe has grown both organically and through acquisitions, extending its geographic reach and product range. The company now manufactures and distributes specialist Gastroenterology, Urology, and Endoscopy products across Europe, including Creo’s own products, Creo-branded third-party products, and distributed third-party products.
Luis Collantes, Managing Director of Creo Europe, will continue to lead the business with support from both Creo and Micro-Tech. Creo will retain several board seats at Creo Europe, and both companies will explore co-branding and registration strategies for Creo’s core products in the Chinese market.
Craig Gulliford, Chief Executive Officer of Creo, said: “Micro-Tech is not only China’s leading endoscopic instrument company, but also a significant global brand in the GI Endoscopy market. The Sale represents an excellent strategic partnership for us and will support our continued commercial growth in the APAC region through product registration and co-branding in China.
Furthermore, Creo Europe will also gain access to the wider Micro-Tech product portfolio and access to a complementary range of products under the Creo brand, ensuring the same confidence in long-term supply to our developing global sales channels. This strategic partnership also enables a global leader in our market to gain access to our advanced energy platform in China, as well as opening up exciting co-development opportunities in our quest to be at the forefront of advanced energy in the GI endoscopy and minimally invasive surgery markets.
“Creo Europe has performed strongly since its acquisition and subsequent integration, with an enlarged product portfolio and enhanced Creo product brand, with sales now established in the US and LATAM markets. We are delighted to be able to retain a significant interest in Creo Europe following the transaction, whilst generating a return on our initial investment, strengthening our balance sheet to invest in our core strategy.
“The potential of this partnership to accelerate growth through Creo Medical Europe, with a harmonised brand and product strategy across our global commercial operations outside Europe, is really exciting and will enable us to enhance our customers’ procedure repertoire and further strengthen the clinical benefits we can deliver for patients.”
Xiaohui Long, Chairman of Micro-Tech, said: “Creo is a medical device company focused on the development and commercialisation of minimally invasive electrosurgical devices. As a leading Chinese manufacturer of endoscopic diagnostic and therapeutic devices, Micro-Tech has been continuously expanding its overseas sales channels and seeking valuable partnerships for innovative products. Creo’s subsidiary, Creo Europe, is a key medical device distributor in Western Europe, and its sales channels and products are highly complementary to those of Micro-Tech.
Upon completion of this acquisition, Micro-Tech will be able to introduce more products to Creo Europe, empower Creo’s R&D and market expansion efforts, and bring new momentum to the development of both companies. Micro-Tech, Creo and Creo Europe share a high degree of strategic alignment and synergy and we also share a common goal – to provide better medical solutions for patients and doctors. This acquisition will be mutually beneficial to all parties, helping us achieve our shared growth goals.”
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