TE Connectivity pushes into medical devices with Creganna buy

(Reuters) - TE Connectivity Ltd, a Swiss-based manufacturer of electronics and sensors, said it would buy Creganna Medical Group for $895 million, expanding in the fast-growing business of making equipment used in minimally invasive procedures.

The acquisition comes nearly a year after TE Connectivity bought AdvancedCath, a catheter systems maker, for $190 million.

“We expect our interventional sales post Creganna will increase to well over $300 million,” TE Connectivity President Terrence Curtin said on a conference call with analysts on Tuesday.

Creganna had about $250 million in sales in 2015.

TE Connectivity, which split from Tyco International Ltd in 2007, sold nearly all of its network gear business to CommScope Holding Co Inc for about $3 billion in January last year.

Ireland-based Creganna Medical designs and manufactures minimally invasive delivery and access devices serving medical device original equipment manufacturers.

“Creganna holds an 8 percent share in the medical interventional connector market. This provides TE Connectivity with another high-growth end-market to expand,” Macquarie Research Mike Wood wrote in a note.

Minimally invasive procedures involve using devices such as catheters to make tiny incisions instead of creating large openings on the body.

TE Connectivity sells its wire and cables, as well as temperature and pressure sensors, to medical device makers.

The company is acquiring Creganna from investment firm Permira, which bought a majority stake in the company from Altaris Capital for 220 million euros in 2010.

TE Connectivity said the acquisition is expected to add 3 cents per share to earnings in the first full year after the deal closes, probably in the third quarter of 2016.

Morgan Stanley was TE Connectivity’s financial adviser, while Davis Polk & Wardwell LLP was the outside counsel.

Piper Jaffray was the financial adviser to Permira funds and Skadden, Arps, Slate, Meagher & Flom LLP its legal adviser.

TE Connectivity’s shares were down about 3 percent at $55.35 in late morning trading.

Reporting by Kshitiz Goliya in Bengaluru; Editing by Sriraj Kalluvila