The operation will be integrated into Solesis Medical Technologies, a group of businesses within the AEP division that oversees the overwhelming majority of Fenner's medical business, Hobson said in a recent interview. Certain other AEP operations have a very limited presence in the health care industry, he said.
London-based Fenner, a leader in the development and application of reinforced polymer technology, said the acquired business had sales of about $19.6 million in 2014. Hobson noted that Solesis had revenues of approximately $42 million last year, which means revenues of the company's medical operation will increase by slightly less than 50 percent.
Charter will provide a solid addition to the capabilities and offerings of Solesis, which will now be made up of three businesses, Hobson said.
He said that the deal continues Fenner's strategy to develop its medical business both organically and via acquisition. All three operations that make up Solesis are U.S.-based, he noted, and primarily serve the U.S. health care market. It does export to foreign companies, but that part of its operation is quite limited, he said.
“Charter has a strong, established business in (the) blood transfusion and filtration markets and has exciting opportunities in the bio-processing and regenerative medicine markets, in which Fenner is already active and which are experiencing rapid growth,” Hobson said.
Similar to all businesses within the AEP division, he said the company “applies its polymer technology to solving problems in performance-critical applications.”
Lydall sold the 25-year-old polymeric product business because the move was “clearly aligned with our strategy to focus our resources on our core businesses in the thermal/acoustical and the filtration and engineered materials segments,” according to Dale Barnhart, president and CEO of the Manchester, Conn.-headquartered company.
He said that Fenner's focus on medical and life sciences applications, through its Solesis operation, “offers an excellent platform for Charter Medical to continue to grow through providing its customers with customized and innovative single-use solutions.”
While its health care business is growing, AEP has been dealing with the impact of a decline in oil prices on oil and gas products it produces, Hobson and Finance Director Richard Perry said in a trading update issued Jan. 14.
Trading in the AEP division overall has been in line with the company's expectations during the last three months, continuing the trend of its improving performance for the second half of 2014.
But they said the recent fall of oil prices is expected to affect demand levels in AEP businesses directly involved in the oil and gas industry, noting that the non-oil specialty polymer businesses in the division represents about two thirds of its sales.
Overall, however, oil and gas is Fenner's second largest served market, ranked behind conveyor belts.
The expected drop in demand for oil and gas goods will bring about cost reductions that are targeted carefully to ensure the firm retains its ability to continue developing the business, the officials said.
Oversupply in global mineral markets and low commodity prices worldwide continue to affect Fenner's Engineered Conveyor Solutions division, where conveyor belting is the dominant segment, they said. In addition, profit margins continue to decline in Australia, and demand levels in the Americas are low but stable, the officials said.
Because of that, further cost reductions are being implemented in all the territories covered by the business.
Discussing the sluggish conveyor belt market, Hobson said miners everywhere are carefully managing their costs. “As a result, demand for all mining products and services has declined and remains at a lower level than a few years ago.”
Hobson and Perry did not say what cuts were being made. Hobson did say that a number of capital improvement programs planned for 2015 are being curtailed with the company only moving forward on essential or near-term payback projects.