Disposable medical product supplier Medical Action Industries Inc (MDCI) has wrapped up its acquisition of custom procedure tray maker AVID Medical for $62.5 million in cash. 
 
Virginia-based AVID Medical manufactures and supplies custom procedure trays (a set of disposable products for surgical procedures) and serves acute healthcare organizations across the U.S. The company’s procedure trays are designed to help hospitals control expenses while enabling them to provide the best patient care. AVID booked roughly $136 million in revenues from procedure trays during its most recent fiscal year.
 
Brentwood, New York-based Medical Action develops and markets disposable medical devices to acute care facilities across domestic and specific international markets. The company reported disappointing results in the most recent quarter with revenues and profit dipping year-over-year, partly attributable to higher raw material costs, soft product demand and order fluctuations by two major customers.
 
The acquisition provides Medical Action a comprehensive product line which is complementary to its market-leading single-use medical products. Moreover, it also enhances the company’s ability to serve healthcare providers in acute care facilities and surgery centers, leveraging a broader product range. Integration of AVID Medical will also broaden the company’s national footprint.
 
Custom procedure trays, which has been estimated to be a more than $2 billion market, represents an attractive opportunity for Medical Action to boost sales by offering a comprehensive suit of clinical and patient care products.
 
Medical Action expects the acquisition to play a key role in helping it to reach its target of achieving $500 million in annual sales. Moreover, the transaction is expected to be accretive to the company’s fiscal 2011 (ending March 31, 2011) earnings. Medical Action also expects to attain meaningful cost synergies and operational efficiencies through integration of nationwide sales forces, expanded service coverage and combined clinical expertise.      


 
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