Cantel Medical Corp. (NYSE: CMD) acquired another medical device company last week, Hu-Friedy Mfg. Co., LLC. The target company has a long history as a dental instrument manufacturer, providing instrument reprocessing workflow systems that have served the dental industry for over 111 years.

Cantel agreed to pay $725 million upfront, $60 million of which will be paid in Cantel stock and the rest in cash (3.x revenue and 15.1x EBITDA), and up to $50 million in potential cash and stock earnouts after reaching certain milestones.

Combining Hu-Friedy’s position in dental instrumentation and instrument management systems with Cantel’s dental infection prevention consumables significantly accelerates Cantel’s strategy to be the leading global provider of innovative infection prevention and reprocessing workflow solutions across its key end markets.
This isn’t Cantel’s first deal in this field. In November 2018, the company purchased Omnia S.p.A., which manufactures and distributes a wide-ranging portfolio of sutures, irrigation tubing, and customized dental surgical procedure kits, with a focus on procedure room set-up and cross-contamination prevention.
That deal, however, was much smaller for Cantel, costing the group only $26.1 million, or 1.38x revenue. Cantel’s purchase of Omnia gave the company a significant presence in the European’s infection prevention market and access to products used across multiple dental surgical procedures.