Trelleborg grows in Asia, Central America with acquisition, investments

TRELLEBORG, Sweden—Trelleborg A.B. is strengthening its position within the health care and medical space with a pair of moves aimed at global growth.

The Swedish company, through its Trelleborg Sealing Solutions arm, agreed to acquire medical component maker Baron Group. The Australian-Chinese company's expertise and production capacity in advanced precision components—particularly through injection molding of silicone and plastics—strengthens Trelleborg's technology behind products targeting sleep apnea, respiratory care and chronic obstructive pulmonary disease.

The $300 million cash-and-debt-free deal, expected to be finalized later this year, will strengthen Trelleborg's ability to meet customer demand throughout Asia and Australia. Once finalized, Trelleborg will take on a headquarters facility and two manufacturing locations in Australia as well as two additional facilities in China.

"The acquisition of Baron Group marks a significant milestone in our ambition to build a comprehensive and complete health care and medical offering," Trelleborg President and CEO Peter Nilsson said in a statement. "The company's complementary culture and similar working methods make Baron Group an excellent addition to Trelleborg's existing offerings. We are convinced that this partnership will generate significant sales and production synergies."

Baron Group had sales of around $95 million last year "with a margin well in line with that of the Trelleborg Sealing Solutions business area."

The proposed deal also gives Baron Group the potential to receive an additional amount of conditional consideration of up to $100 million after three years. This, Trelleborg said, "is entirely dependent upon the company's performance meeting prescribed financial thresholds and other conditions."

Backing up its pending acquisition, the medical products manufacturer is growing its global footprint and treading into Central America for the first time.

The company intends to invest more than $21 million to build a 107,000-sq.-ft. health care and medical facility in Grecia, Costa Rica, that will support the growing medical industry in the region.

"Costa Rica has evolved into a medical technology hub in Central America and the facility, therefore, represents an important step in both increasing our capacity and broadening our geographical footprint in health care and medical," Nilsson said in a statement.

To be located in Grecia—near a port, international airport and a short drive from main cities in western Costa Rica—the new facility will feature efficient and sustainable cleanroom production designed to meet stringent industry-specific standards for medical device manufacturing.

It is expected to come online in 2025 and will combine the expertise of Trelleborg and soon-to-be acquired Baron Group.

"The facility is being built for customers with global sales, and the capacity it will add will also benefit Baron Group, the Australian-Chinese company we recently signed an agreement to acquire," Nilsson said. "Trelleborg's know-how combined with Baron's technology will provide the basis for the new facility."

The building, Trelleborg noted, will be a LEED-certified (Leadership in Energy & Environmental Design) facility.