Heraeus announced its acquisition of Norwood Medical, a provider of outsourced medical manufacturing solutions in three key markets: minimally invasive surgery, orthopaedics and robotic-assisted surgery.
Heraeus also announced that Norwood Medical will continue to operate as a standalone business and retain its company name and management team.
The announcement came days after the death of Kenneth J. Hemmelgarn, president of Norwood Medical. Hemmelgarn died Dec. 5 at the age of 89.
Terms of the acquisition were not released. But in an interview with the Dayton Daily News Tuesday, Oddo said the acquisition was “significant.”
“It’s two private companies,” he said, adding that Heraeus has more than 15,000 employees worldwide.
Based in Dayton, off Winners Circle, Norwood Medical has nearly 1,200 local employees.
No changes to the number of employees in Dayton is planned, Oddo said. Norwood does not present a duplication of services or work for Heraeus, he said, calling the move “a great complementary opportunity.”
“As a matter of fact, their (Norwood’s) human resources department, they’re already looking at their next phase of expansion,” he said.
Heraeus focuses on the production of active pharmaceutical ingredients for drugs and treatments, and the production of Palacos, a brand of bone cement for orthopedic joint replacement surgeries.
Discussions took place throughout 2021, Oddo said.
Brian Hemmelgarn, a principal of Norwood, said in an interview that Norwood had hired a consulting company to draft a five- to 10-year plan for the company to chart a course for the future.
Two possibilities emerged: Find another business to acquire in what was then a huge consolidation happening in the medical manufacturing industry — or find a partner for Norwood.
Brian Hemmelgarn and his brother, Ken Hemmelgarn Jr., vice president of finance for Norwood Medical, visited Heraeus in Germany. “We found they had a similar culture as we have at Norwood,” Brian Hemmelgarn said.
Norwood had a number of potential suitors, but Heraeus was ideal in terms of culture and willingness to take care of the company’s workforce, he said.
“They said, ‘We want to grow in Dayton, Ohio,’” Brian Hemmelgarn said.
Jan Rinnert, chairman of the board of managing directors and chief executive of Heraeus Holding, said in a release: “Heraeus and Norwood Medical share a common vision for transforming medical technology to help our customers deliver innovations that produce better outcomes for patients. When we began discussions, it was evident that Norwood checked all the boxes: an experienced team, an outstanding innovation culture and a track record of manufacturing excellence. We are very confident we can accelerate their growth and penetrate new markets around the world.”
Ken Hemmelgarn Jr. said in the same statement, “Growing our business, expanding our capabilities and delivering greater value to our customers and the end-patient have always been the guiding principles of our strategic approach. By joining Heraeus and capitalizing on their global reputation as a market leader in medical technology, Norwood will be able to scale our business and achieve our mission.”
Credit: HANDOUT
Credit: HANDOUT
Norwood was founded as a tool and die manufacturing operation in 1927.
Earlier this year, Norwood Medical received zoning approval to move forward with constructing a new, 33,120-square-foot building near its main campus in the McCook Field neighborhood.
The company said it planned to invest $4.5 million to $23 million into the facility, between new construction, equipment, machinery and inventory. About 40 new jobs were planned with this most recent expansion.
Today, Norwood provides medical device industry companies with a “full range of specialized, precision manufacturing and secondary processing and assembly,” Heraeus said in its release.
Heraeus is a technology group headquartered in Hanau, Germany, with roots going back to a family pharmacy started in 1660.
According to a brochure Heraeus prepared for Norwood employees, the German company saw revenue of 31.5 billion Euros (about $35 billion) in 2020.
“These health care businesses are all running independently and are key to our long-term strategy,” the brochure says. “Norwood Medical will be no different. It will remain independent and will remain at the Dayton site. Our goal is to help Norwood capitalize on its strong capabilities and innovation pipeline to achieve even greater growth through new customers and, if possible, future acquisitions.”
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