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Chicago equity firm purchases Flexan

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The three owners of Flexan Corp.
Photo by RPN photo by Bruce Meyer The three owners of Flexan Corp. and FMI Inc., (from left) Bruce Cohen, Scott Severson and Frank Sullivan, pose at the firm's headquarters in Chicago.

CHICAGO—Linden Capital Partners L.L.C., a private equity firm with a focus on the health care industry, has purchased high-precision silicone and rubber parts manufacturer Flexan Corp.

Both parties are based in Chicago, with Flexan operating two facilities in the area—including its medical device/silicone rubber subsidiary FMI Inc. Flexan also operates a plant in Suzhou, China.

Financial terms of the deal were not disclosed. Linden and Flexan officials declined further comment beyond a recently issued news release. Rubber & Plastics News reported Flexan's sales at about $40 million in November 2013.

Linden said it has now invested more than $1 billion in health care and life science companies, managing $575 million in assets.

“Linden is a natural strategic fit for the company because of their exclusive focus on health care and their deep medical products and contract manufacturing expertise,” Flexan CEO Scott Severson said in a statement. “Linden understands our history and our culture and can support both our organic growth and acquisition initiatives.”

Flexan serves the medical device, hearing technology, industrial and commercial markets. Flexan is a custom molder and rubber-to-metal bonder. FMI makes clean room-produced silicone rubber molded components for use in Class II disposable and Class III implantable medical devices.

The firm employs about 500 worldwide, Linden said. According to Rubber & Plastics News, as of November 2013 the company employed about 225 at its China operation, which includes a 90,000-sq.-ft. facility and a clean room to produce FMI goods and another 55,000-sq.-ft. facility for the industrial/commercial side of the business, also housing mixing and warehousing functions.

Flexan's facility in Chicago spans 65,000 square feet and employs about 175. Its FMI facility is about 20,000 square feet with about 100 employees and consists of 20 presses.

“Flexan has distinguished itself through its people, track record and proprietary capabilities,” Linden Operating Partner Ron Labrum said in a statement.

Labrum also was named chairman of Flexan's board of directors, bringing 30 years of experience in the medical products industry. He joined Linden in December, previously serving as CEO of Fenwal Inc., a $630 million device manufacturer focused on blood technologies divested from Baxter International.

Flexan's top executives—Severson, President Bruce Cohen and FMI President Frank Sullivan—will join the board of directors and continue to serve the company in their current roles, Linden said.

Jeff Golman, vice chairman and head of Mesirow Financial's Investment Banking group—the bank that acted as financial adviser to Flexan in the transaction—said Linden was attracted to Flexan's strong customer base, the markets where it did business and the scalability it provides.

Golman said a number of parties were interested in purchasing Flexan and working with its management team.

“They're a great group and an impressive company that did a lot of things right over a lot of years to produce an outcome that everyone is very pleased with,” Golman said. “They're a true middle market company with a very solid margin profile and a global manufacturing footprint. They have a great customer base and a diversity of end markets.”

He said Flexan is well positioned in high end growth markets, and the fact that the firm was proactive in setting up a greenfield facility in China to service multiple regions was a big strength. Flexan established its Chinese operations in 2004.

“It's not all that typical to see a company of Flexan's size set up a greenfield operation in China,” Golman said. “And they did that, and it was a very strategic move that really helped in the growth of the company.”

Flexan does not have a manufacturing presence in Europe, which Golman said is a potential opportunity. However he added that the firm likely can service that region from either the U.S. or China.

“I don't know if that is No. 1 on the agenda, but there are global growth opportunities, and Europe is certainly a market where there are additional opportunities,” he said.