Finland’s Nordic Capital private equity firm has invested $300 million in 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 at its inception. The company quickly became profitable and so no major investment was required after that. Tens of millions of dollars have since been invested in R&D and construction of a manufacturing plant but these funds came from profits. In terms of external investment, the company has only raised several tens of millions of dollars.
According to the company 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 is rather for the acquisition of stakes from existing shareholders, with Shem-Tov receiving an estimated $100 million. Over the years, he has already received dividends from the company worth tens of millions of shekels.
Others profiting from the deal include investment house Altshuler Shaham, which holds 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 received options over the years.
Equashield’s high profitability has been due to the fact that Shem Tov built its factory in Tefen with all the knowledge it had gained from years of planning and managing the construction of pharmaceutical and medical device factories. The factory is almost completely automated, applies artificial intelligence in production processes and has about 482 employees, compared with thousands of employees in similar factories producing similar products.
The company is also currently developing a robotic product, which will not only protect the workers in the process of preparing the drugs, but will also speed up the process and prevent mistakes. Today the company has annual revenue of hundreds of millions of dollars, and Nordic is likely convinced that the robotic product will increase revenue. Equashield is currently hiring more engineers and building another production plant.
Published by Globes, Israel business news – en.globes.co.il – on October 6, 2022.
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