Langer Inc. is expanding its base in the orthopedic and prosthetic industries and entering the skin care market with the purchase of the Silipos business from SSL International P.L.C.
The two companies tentatively agreed to the sale of the elastomer-based gel unit Sept. 23. Langer will pay about $15.5 million for the business, according to an SSL spokesman. The firm will obtain the entire Silipos business, including a 40,000-sq.-ft. factory and its equipment in Niagara Falls, N.Y.
Long Island-based Langer will pay $5 million in cash when the deal closes, a $7.5 million promissory note due by March 31, 2006, and a second $3 million promissory note due by Dec. 31, 2009, according to the companies.
The sale needs regulatory approval, but the SSL spokesman said the transaction was expected to close Sept. 30. The deal completes the London-based company's realignment to a consumer product maker.
Silipos is the last medical products manufacturing business SSL had on the market. By divesting the unit, the company can concentrate solely on its consumer goods operation, including the production of rubber latex condoms.
With about 65 percent of Silipos' sales in the orthopedic and prosthetic industries, a large portion of the unit's business ties in with Langer's core markets, while Silipos' skin care business provides an entry into the multibillion dollar cosmetics market, said Andrew H. Meyers, Langer president and CEO.
The deal allows Langer to diversify into higher-margin, proprietary products in the orthopedic, orthotic and prosthetic, and skin care markets, he said.
The Silipos operation had sales of about $22 million in the fiscal year ended March 31, the spokesman said. He didn't have figures available for the 2003 fiscal year.
SSL has spent close to three years trying sell its entire medical products division.
In July, the company sold its Regent rubber and synthetic latex surgical gloves and Hibi antiseptics businesses to a management buyout group for $290 million and the assumption of about $18 million in debt. Last November, Comasec S.A. bought SSL's Marigold industrial glove operation for an estimated $37 million and in March 2003 Medlock Medical Ltd. purchased SSL's wound care management business for about $100 million.