Target: Veterinary business of Sanuwave Inc.
Sponsor: Topspin Partners LBO
Seller: Sanuwave Inc.
Legal Adviser: Sponsor: Lowenstein & Sandler PC
The Topspin Partners-led deal, which closed on June 5, included the acquisition of the VersaTron family of pulsed-energy therapeutic products, which includes devices used for the non-invasive treatment of musculoskeletal disorders that cause chronic pain and lameness in horses and dogs. The products have been available since 2002 in the United States and, to a lesser extent, Europe and Japan, where professionals from Topspin Partners and Integris plan to beef up the company’s exposure through increased sales, Leigh Randall, a managing director at Topspin Partners, told Buyouts. Firm executives also hope to expand the company’s market share in the horse and dog markets, Randall said.
Topspin Partners executives were attracted to the company because it offers a non-invasive, ultrasound-like alternative treatment of conditions that affect millions of pets. The treatments involve focused electro-hydraulic shocks that have a healing affect on tissue. In the United States, Randall said, 12 million dogs suffer from osteoarthritis.
Firm executives did not release terms of the deal, though Topspin Partners typically writes equity checks of between $5 million and $15 million; no debt financing was used in the deal, Randall said.
Topspin pros have no experience with veterinary medicine or medical devices, though Rich Effress, the sole principal of Integris and chairman of the new company, Pulse Veterinarian Technologies, has a strong background in medical devices. Effress co-founded MedSource Technologies Inc., a company that provided manufacturing and engineering services to companies in the medical device industry. It was Effress who brought the veterinary deal to Topspin Partners executives in April.
Randall said he was interested in the company because it’s in an established market, the company’s revenue has been growing at double-digit rates, it has patent-protected technology and because there is recurring revenue in machine part replacements and updates. Topspin Partners traditionally targets deals in consumer products, niche manufacturing, business services and retail.
For Topspin Partners, the investment comes out of its first buyout fund, a $132 million pool the firm closed in 2007. Most investors in the fund are family offices and wealthy individuals.
Sanuwave disposed of the division because it is focusing on the human clinical market, Chris Cashman, president and CEO of the company, said in a statement.