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ARCHIMED earns 5x its investment, selling a majority of Ad-Tech to Tokyo-listed Nihon Kohden
November
26,
2024
ARCHIMED earns 5x its investment, selling a majority of Ad-Tech to Tokyo-listed Nihon Kohden
As part of the transaction, Nihon Kohden, one of the largest developers and distributors of medical electronic equipment in the world, is entering a joint-venture with ARCHIMED to pursue Ad-Tech’s growth in North America, Europe, and Asia.
Global private equity healthcare specialist, ARCHIMED announces the sale of a 71.4 percent stake in Ad-Tech, held by its MED II fund, to Tokyo Stock Exchange-listed Nihon Kohden (TYO: 6849), earning 5 times its investment. Nihon Kohden, a global leader in medical device innovation for high-precision patient monitoring and diagnostics, is entering a joint venture with ARCHIMED as part of the deal. Under the joint venture, ARCHIMED retains a 28.6 percent stake in Ad-Tech through MED II.
Founded in Greater Milwaukee in 1983, Ad-Tech is the world’s leading manufacturer of intracranial neuro electrodes. Ad-Tech’s minimally invasive devices provide brain mapping used in the diagnostics and treatment of a wide range of disorders, including epilepsy. Ad-Tech products are approved for use in more than 60 countries and have a strong reputation among the neurosurgical community.
After acquiring Ad-Tech in 2020, ARCHIMED strengthened Ad-Tech’s business foundation and generated sustainable growth, acting as a catalyst for innovation and internationalization. ARCHIMED also appointed Brian Smith as Ad-Tech CEO to drive value creation. Smith is an Operating Partner of ARCHIMED with decades of experience in managing Healthcare industrial businesses.
The transition from founder-ownership to ARCHIMED saw a dramatic spike in investment to expand Ad-Tech. ARCHIMED provided capital for expanded clean-room manufacturing facilities, broadened regulatory capabilities to permit greater European expansion and accelerated product development, tripling the size of the company’s research & development pipeline. Since ARCHIMED’s acquisition, Ad-Tech has delivered strong organic growth and increased profitability, with earnings before interest, taxes, depreciation and amortization rising three-fold on a purely organic basis.
“This acquisition represents a pivotal step in advancing critical solutions for epilepsy care,” says Roy Sakai, President of Nihon Kohden America. “By uniting our strengths, we’re enhancing our ability to provide end-to-end support for epilepsy—from accurate diagnosis to advanced interventions.”
Under the joint venture, Nihon Kohden and ARCHIMED will drive Ad-Tech’s future growth cycle and ensure a smooth transition, ultimately focusing on improving health outcomes for patients.
“The Ad-Tech story is a showcase example of ARCHIMED’s strategy to create sustainable value in high potential companies within the global healthcare industry, offering plug-and-play business units to global specialized players,“ says Vincent Guillaumot, managing partner at ARCHIMED.
ARCHIMED’s presence in Asia, with offices located in Tokyo and Singapore, has played a crucial role in facilitating negotiations and fostering discussions with Asian healthcare companies. In addition to closing Ad-Tech, since the Tokyo office launched in January 2024, ARCHIMED acquired and took private Korean-listed company Jeisys Medical, a global leader in non-invasive aesthetic medicine devices, with particularly strong sales in Japan. “Those successes underscore the importance of a physical presence in Asia,” says Guillaumot.
The Nihon Kohden deal highlights our capacity to act as a strategic partner. It’s also our first transaction and partnership with a Japanese firm, demonstrating the importance of ARCHIMED’s recently opened Tokyo office.”
ARCHIMED partner, Vincent Guillaumot
ARCHIMED’s 5x return on its latest transaction is the average of ARCHIMEDs realized returns on portfolio company sales over the last 10 years. The fully invested MED II raised €315 million in 2018 and invested in 10 platform companies through majority buyout transactions. Baird acted as ARCHIMED’s M&A advisor on the Ad-Tech transaction.