UFP Technologies Acquires AJR Enterprises
UFP Technologies (Nasdaq: UFPT) has acquired AJR Enterprises for $110 million.
AJR, based in Illinois and the Dominican Republic, specializes in single-use safe patient handling systems and generated sales of $75 million in the last 12 months ending March 31, 2024.
The acquisition aims to enhance UFP's patient surfaces portfolio, leveraging AJR's 'cut and sew' services and specialty fabrics expertise.
This strategic move aligns with UFP's goal to expand capabilities and provide comprehensive development, commercialization, and manufacturing services.
The transaction was financed through UFP's amended credit agreement.
- UFP Technologies' acquisition of AJR Enterprises for $110 million enhances its patient surfaces portfolio.
- AJR Enterprises reported $75 million in sales for the trailing 12 months ending March 31, 2024.
- The acquisition aligns with government guidelines and legislation on safe patient handling.
- Combining AJR’s expertise with UFP's thermoplastic joining capabilities offers comprehensive market solutions.
- The acquisition was financed through UFP's amended credit agreement, indicating financial stability.
- None.
Insights
The acquisition of AJR Enterprises by UFP Technologies is a significant strategic move, valued at
Furthermore, AJR's consistent growth and solid financial performance, as evidenced by their rising sales and EBITDA, suggest that UFP is acquiring a stable and growing entity. This move is likely to enhance UFP’s financial position in both the short and long term, making the company more attractive to investors.
For retail investors, UFP’s leveraging of credit to finance this acquisition should be seen as a calculated risk aimed at achieving significant growth. This strategy, if well-executed, can lead to higher stock valuations and potential dividends.
The acquisition of AJR Enterprises is a strategic play by UFP Technologies to expand within the growing market of patient handling solutions. Government guidelines and legislation around safe patient handling are contributing factors to the increasing demand in this sector. This acquisition allows UFP to tap into the specialized ‘cut and sew’ manufacturing and specialty fabrics expertise that AJR offers, aligning well with UFP's existing capabilities in thermoplastic joining.
This strategic alignment not only broadens the product portfolio but also enhances UFP's value proposition to its customers by offering a more comprehensive suite of solutions. The integration of AJR’s services with UFP’s existing offerings is likely to result in operational synergies and cost efficiencies, providing a competitive edge in the market.
For retail investors, this acquisition could indicate UFP’s commitment to staying ahead of industry trends and regulatory changes, potentially resulting in market share gains and future revenue growth.
The acquisition of AJR Enterprises by UFP Technologies signifies an important expansion into the safe patient handling systems market. AJR's expertise in single-use safe patient handling systems complements UFP’s existing medical device and sterile packaging solutions. This is particularly relevant given the increasing focus on patient safety and regulatory compliance in healthcare settings. The ability to offer a broader range of products and manufacturing capabilities can enhance UFP’s appeal to hospitals and healthcare providers, who are constantly looking for reliable and compliant solutions to improve patient care and safety.
For retail investors, understanding the implications of this acquisition can provide insight into how UFP is positioning itself to be a leader in the healthcare manufacturing space. By expanding their product range and manufacturing capabilities, UFP is likely to increase its market penetration and secure long-term contracts with healthcare providers, which could lead to sustained revenue growth and improved shareholder value.
NEWBURYPORT, Mass., July 01, 2024 (GLOBE NEWSWIRE) -- UFP Technologies, Inc. (Nasdaq: UFPT), a designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products, today announced the acquisition of AJR Enterprises, LLC. Headquartered in St. Charles, Illinois, with additional manufacturing in the Dominican Republic, AJR Enterprises develops and manufactures single use safe patient handling systems.
“We are very excited to add AJR Enterprises’ capabilities to our patient surfaces portfolio,” said R. Jeffrey Bailly, chairman and CEO of UFP Technologies. “Patient surfaces and transfer devices are a growing market due in part to government guidelines and legislation around safe patient handling. AJR’s ‘cut and sew’ manufacturing services and specialty fabrics expertise align very well with our strategy to bring more value to our customers through expanded capabilities and locations.”
“Combined with our thermoplastic joining expertise, we can now offer a comprehensive suite of development, commercialization, and manufacturing services for this market," said Bailly. “In addition, AJR Enterprises has an outstanding team that places the same importance on teammate engagement, high ethics, and client satisfaction as does UFP.”
“With UFP Technologies’ ability to expand our capabilities and continue our high standards in quality and service, we found the perfect fit,” said John Rukel, chief operating officer, AJR Group. “Together, our companies will offer extraordinary design and manufacturing capabilities across the safe patient handling space. We are confident that UFP will continue to grow the business while maintaining the culture and values we have built over the past 25 years.”
Transaction Financial Highlights
- UFP acquired AJR Enterprises, LLC for
$110 million - AJR generated sales of approximately
$70 million in 2023 and$75 million in the trailing 12-month period ended March 31, 2024 - AJR generated adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of approximately
$16.6 million in 2023 and$18.3 million in the trailing 12-month period ended March 31, 2024 - The transaction was financed with borrowings under UFP’s amended and restated credit agreement
About UFP Technologies, Inc.
UFP Technologies is a designer and custom manufacturer of comprehensive solutions for medical devices, sterile packaging, and other highly engineered custom products. UFP is an important link in the medical device supply chain and a valued outsource partner to most of the top medical device manufacturers in the world. The Company’s single-use and single-patient devices and components are used in a wide range of medical devices and packaging for minimally invasive surgery, infection prevention, wound care, wearables, orthopedic soft goods, and orthopedic implants.
Forward Looking Statements
This press release contains statements relating to expected financial performance and/or future business prospects, events and plans that are forward-looking statements. Such statements include, but are not limited to: the anticipated effects on us of acquiring AJR Enterprises, LLC, including the debt we incurred to do so; anticipated trends in the different markets in which we compete and expectations regarding customer demand; expectations regarding our business opportunities; and statements about our growth potential and strategies for growth. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could adversely affect our business and prospects, and otherwise cause actual results to differ materially from those anticipated by such forward-looking statements, including the risks that the Company will not realize the anticipated benefits of the acquisition of AJR Enterprises LLC due to the inability of the Company to execute its business strategy, AJR Enterprises integration strategy or otherwise as well as other risks and uncertainties that are detailed in the documents we file with the SEC. Accordingly, actual results may differ materially. Readers are referred to the documents we file with the SEC, specifically the last report on Form 10-K. The forward-looking statements contained herein speak only of our expectations as of the date of this press release. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based.
| UFP Technologies, Inc. | www.ufpt.com | |
| 100 Hale Street | Contact: Ron Lataille | |
| Newburyport, MA 01950 USA | 978-234-0926, rlataille@ufpt.com |
FAQ
What is the value of UFP Technologies' acquisition of AJR Enterprises?
What are the sales figures for AJR Enterprises?
How will the acquisition of AJR Enterprises benefit UFP Technologies?
What is the significance of AJR Enterprises' 'cut and sew' services to UFP Technologies?
How was the acquisition of AJR Enterprises financed by UFP Technologies?
