Brady Corporation, a world leader in identification solutions, announced today that it has acquired Precision Dynamics Corporation from Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, in a cash transaction for $300 million, subject to customary working capital and post-close adjustments. PDC, with annual sales of approximately $173 million, is a leader in identification products primarily for the healthcare market, specializing in patient wristbands, specialty labels and identification systems used in hospitals to reduce medical errors and integrate and share patient data.
PDC, founded in 1956, is based in Valencia, Calif., and employs approximately 1,000 people globally. The company has manufacturing facilities in Tijuana, Mexico and Port Orange, Fla., and a European sales office with light manufacturing in Nivelles, Belgium. PDC’s healthcare wristband and label systems are used by most U.S. hospitals and reach every touch point in the delivery of patient care, from admissions to discharge. PDC’s products also meet important patient safety guidelines of The Joint Commission, FDA, AHA, and HIPAA. In addition to its primary focus on healthcare identification, PDC also offers wristband products for the leisure and entertainment industries and for crowd control and law enforcement utilizing technologies including RFID, holograms and barcodes. PDC products are sold through a direct sales force, distributors and system integrators.
“The acquisition of PDC, a leader in the U.S. healthcare identification space, provides an important anchor position for Brady in the attractive healthcare market and fits well with our mission to identify and protect premises, products and people, and our vision to be the market leader in all of our businesses,” said Brady President and Chief Executive Officer Frank M. Jaehnert. “PDC’s highly regarded management team comes with deep experience in the healthcare identification space and has been very successful in building PDC into the strong business that it is today. PDC’s large customer base, strong channels to market and broad product offering together with Brady’s laboratory and people identification products, deep materials and printer expertise, and global footprint, make this a very attractive business combination and provide a strong foundation to build upon PDC’s market leading position.”
Curt Selquist, an operating partner with Water Street and chairman of PDC stated, “Over the last five years, we expanded and enhanced PDC’s product development and manufacturing capabilities, and significantly broadened its portfolio of identification products through strategic acquisitions. The sale of PDC to such a highly regarded market leader in identification solutions fulfills our mission of having PDC end up with a company that continues this mission of long-term profitable growth.”
Excluding one-time acquisition-related costs, Brady expects this acquisition to be slightly accretive to earnings per diluted share for the remainder of fiscal 2013, and $0.10 to $0.15 accretive to earnings per diluted share in the first full fiscal year. The non-recurring acquisition-related costs are expected to include a one-time, non-cash tax charge of $25 to $30 million related to the repatriation of cash to the U.S. in financing this acquisition and $8 to $12 million of other acquisition-related expenses.
Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Its products help customers increase safety, security, productivity and performance and include high-performance labels and signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has more than 1 million customers in electronics, telecommunications, manufacturing, electrical, construction, , medical and a variety of other industries. Brady is headquartered in Milwaukee and as of July 31, 2012, employed approximately 6,900 people at operations in the Americas, EMEA and Asia-Pacific. Brady’s fiscal 2012 sales were approximately $1.32 billion. Brady stock trades on the New York Stock Exchange under the symbol BRC. More information is available on the Internet at www.bradycorp.com or www.pdcorp.com .
Statement from seller, Water Street Healthcare Partners
Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has sold Precision Dynamics Corporation (“PDC”) to Brady Corporation in a cash transaction for $300 million, subject to customary working capital and post-close adjustments. Water Street divested PDC after spending five years building the company into a global leader in patient safety identification (ID) through a combination of strategic acquisitions and organic initiatives. Headquartered in Valencia, Calif., PDC designs and manufactures products used by hospitals across the United States to reduce medical errors, and integrate and share patient data.
Water Street partnered with PDC’s founders and management team in 2007 to invest in the company when it specialized in health care ID wristbands. Two years later, Water Street facilitated PDC’s acquisition of TimeMed Labeling Systems, Inc. to expand the company’s products into health care labeling systems. In 2010, Water Street initiated an industry-leading merger between PDC and The St. John Companies to create the world’s foremost provider of health care wristbands, specialty labels and identification solutions. The firm recruited an experienced management team to lead the combined company. It invested in PDC’s infrastructure including a new headquarters, manufacturing facility and technology platform to more effectively serve customers.
“PDC is an excellent example of the long-term value Water Street can create in partnership with founders and executives of middle-market health care companies. When we first met with PDC’s founders, we proposed a strategic path to build on the company’s strength in hospital ID wristbands. We invested in the company’s product development and manufacturing capabilities, and significantly broadened its product portfolio to transform PDC into a global leader in patient safety identification,” said Curt Selquist, an operating partner with Water Street and chairman of PDC. “We are pleased that the successful execution of our strategy resulted in a highly regarded market leader purchasing PDC to further its long-term growth.”
Brady President and Chief Executive Officer Frank M. Jaehnert stated, “The acquisition of PDC provides an anchor position for Brady in the attractive health care identification space and fits well with our mission to identify and protect premises, products and people. The company’s management expertise, large customer base, strong channels to market, and broad product offering have made PDC the domestic market leader in health care identification. The strengths of PDC, together with Brady’s health care identification product offering, deep materials and printer expertise, and our global footprint, make this a very attractive business combination.”
About Water Street
Water Street is a strategic private equity firm focused exclusively on health care. The firm has a strong record of building market-leading companies across key growth sectors in health care. It has worked with some of the world’s leading health care companies on its investments including Gentiva, Johnson & Johnson, Medtronic and Smith & Nephew. Water Street’s team is comprised of industry executives and private equity professionals with decades of experience investing in and operating global health care businesses. The firm is headquartered in Chicago. For more information about Water Street, visit waterstreet.com.