Mirus Capital AdvisorsMirus Capital Advisors

Mergers and Acquisitions, Healthcare, Industrial

M&A: Keep it clean. Disposables, protective equipment, single-use technologies, and cleanroom operations on the rise.

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The world can be a messy place.  Companies that focus on keeping it a bit (or a lot) cleaner play an important role in public health, medical research and pharmaceutical manufacturing, to name just a few areas.   The economic impact of contamination in those fields can be tremendous.  Add to that the public health concerns raised every few years by diseases such as SARS, Avian Flu and now Ebola and the impact can reach well beyond the healthcare field.  For example, just last month, about 200 airline cabin cleaners walked off the job at LaGuardia Airport – protesting what they believed was insufficient protection from exposure to Ebola.  This past summer, a CDC lab potentially exposed 75 staff members to Anthrax because of safety problems.  On the more positive side, single-use / disposable technologies are being employed not only to reduce contamination risks, but also to reduce costs in sterilization and maintenance. Companies providing products and services which address decontamination, clean room operations and inspections, disposable / single-use applications, and protective equipment are at the forefront of this active area.

Single-use equipment and consumables are becoming more important in a few fields. A majority of researchers say they employ disposable tools to avoid cleanup “often” and “always.”  The popularity of single-use products has increased as life science companies deal with reduced capital investment, high development costs and increasing demand. These products reduce the cost associated with cleaning protocols and the usage of complex steps, such as sterilization, cleaning, maintenance and overall contamination. Products are shipped pre-sterilized, eliminating the need for autoclaving or steam-in-place processes.  Additionally, the need for a cleanroom assembly environment can be eliminated.  Whereas conventional bioreactors rely on a culture vessel made from stainless steel or glass, single-use reactors come with a disposable bag made of multi-layer plastic. In addition to reduced upfront investment, manufacturer reports have confirmed that lifecycle costs can be reduced significantly when comparing single-use with conventional bioreactors.  We’re seeing a steady pace of M&A activity in this market. A recent Mirus client was acquired by VWR International, a global lab distribution company, in part due to its success in this single-use world.  Our client  provided comprehensive single use connectivity solutions including tubing, hoses and gaskets for high-purity environments and operated two ISO Class 7 clean rooms.

A clean environment is important outside of pharmaceutical research and production, in areas such as pharmaceutical compounding. Another recent Mirus client was sold to a global provider of services to the hospital market for the client’s expertise in cleanroom and controlled environment testing and certification services.

We’re bullish on M&A in the “clean” sector and welcome discussing your business’s strategy to address these important needs.