Finnish private equity firm Nordic Capital has invested $300 million in an Israeli medical device company Equashield Medical for a 25% stake, at a company valuation of $1.3 billion. Equashield Medical develops, manufactures and markets devices to make drugs safer in hospitals by protecting healthcare workers from exposure to hazardous drugs and preventing microbial contamination.
Equashield Medical was founded by CEO Eric Shem-Tov in 2008, who invested several million dollars in the company upon its inception. The business quickly became profitable, so no major investment was needed afterwards. Tens of millions of dollars have since been invested in R&D and building a manufacturing plant, but those funds came from profits. In terms of external investments, the company has only raised a few tens of millions of dollars.
According to the Companies Registry, Shem-Tov will retain 25% of the company after selling the stake to Nordic. Nordic Capital’s investment will not go into the company’s coffers, but rather to acquire stakes from existing shareholders, with Shem-Tov receiving around $100 million. Over the years, he has already received dividends from the company worth tens of millions of shekels.
Other beneficiaries of the deal include investment firm Altshuler Shaham, which has a 10% stake in Equashield Medical, Equashield Chairman Meron Mann, who joined the company two years after it was founded, Marino Kriheli , another founder, and Yossi Sagol, the son of Keter Plastics owner Itzhak Sagol, and company employees, who have received options over the years.
The high profitability of Equashield is due to the fact that Shem Tov built its factory in Tefen with all the knowledge gained from years of planning and managing the construction of pharmaceutical and medical device factories. The factory is almost fully automated, applies artificial intelligence in production processes and has around 482 employees, compared to thousands of employees in similar factories producing similar products.
The company is also currently developing a robotic product, which will not only protect workers during the drug preparation process, but also speed up the process and prevent errors. Today, the company has annual revenues of hundreds of millions of dollars, and Nordic is likely confident that the robotic product will boost its revenue. Equashield is currently hiring more engineers and building another production facility.
Published by Globes, Israel business news – en.globes.co.il – on October 6, 2022.
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