Moog Inc., continuing its push to build up its medical device business, agreed Friday to buy a Utah medical pump manufacturer for $83.8 million, the Elma company said.
Moog's acquisition of Zevex International is its third purchase of a medical device manufacturer since April and will add a profitable business that had $41 million in sales last year.
"It really strengthens our position in the infusion therapy business," said Robert T. Brady, Moog's president and chief executive officer. "There are not many companies available in this size range that have these capabilities."
Zevex makes a line of portable and stationary pumps that are used primarily by patients who require feeding tubes, either in a hospital, nursing home or home setting. The company also makes ultrasonic and optical sensors, as well as a portable cooler used to transport organs for transplant surgery.
"It's a growing market because people are getting older," in addition to demand from patients suffering from diseases such as AIDS, Brady said.
Together with Moog's California-based Curlin Medical business, which it acquired in April for $75 million, and the McKinley Medical drug infusion pump business that it purchased in August for $15 million, the Zevex deal will roughly double the sales in Moog's medical device business to around $80 million a year.
Moog agreed to buy Zevex for $13 per share in cash, a 39 percent premium from Zevex's share price of $9.37 before trading was halted in the stock on Friday. Zevex's shares traded for as much as $17.39 in mid-July.
The deal still must be approved by Zevex shareholders. Moog hopes to close on the purchase in March, which would boost its medical device sales to about $65 million during the fiscal year that ends in September.
Moog does not expect the acquisition to have any impact on its earnings during the current fiscal year.
Zevex's operating profits more than doubled to $2.7 million during the first three quarters of last year, the latest period for which earnings information is available.
Zevex's sales for all of last year jumped by 53 percent, with two-thirds of its revenues coming from infusion therapy and the rest from its sensors, hand pieces and organ transport systems, Moog said.
Moog, which melded McKinley's operations into Curlin following that acquisition, plans to keep Zevex's operations in Salt Lake City, where the company employs 178 people.
"We will expand our offering of fluid delivery technologies, based upon Moog's electronic and disposable infusion products," said David J. McNally, Zevex's president and chief executive officer, in a statement.