Agile Capital Acquires Significant Equity in SA Biomedical

Due Diligence: Agile Capital CEO sees opportunity in infrastructure and agri-processing
2018-05-11

Agile Capital Acquires Significant Equity in SA Biomedical

Sandton, August 2018. Agile Capital, via its third fund, has secured a considerable stake in medical devices business, SA Biomedical.

Agile Capital enjoys a diverse investment portfolio across multiple sectors as a key black-owned private equity player in the local market. “Our preferred investment vehicles provide opportunities to assert meaningful change,” notes Tshego Sefolo, CEO: Agile Capital. “We are exceptionally pleased with this sizeable transaction that forms our initial entry into the medical devices industry.”

SA Biomedical is a leading distributor of orthopaedic, spinal, surgical and vascular products focusing on the import, export and distribution of medical devices, instrumentation, consumables and medical equipment.

The deal sees Agile obtain a 26% stake in the business, with a long-term outlook as a shareholder of reference. “Our purchase provides a boost for the company’s empowerment credentials in a sector both ready for transformation and requiring same,” explains Londeka Shezi, director: Agile Capital. “We see this as a growing industry especially considering the increased need for appropriate healthcare across the country.”

“SA Biomedical has a national footprint with branches in Cape Town, Bloemfontein, Port Elizabeth, Johannesburg and Durban, with our head office based in Cape Town,” notes John Bisset, CEO: SA Biomedical. “We hold an extensive track record spanning three decades with a focus on the distribution of innovative products and surgical solutions that assist healthcare specialists in the safe and effective treatment of their patients.”

The medical devices market in South Africa is one of the largest across the continent, being valued at approximately US$1billion in 2015 despite remaining underdeveloped. “This market consequently holds remarkable growth potential,” holds Sefolo. “Aside from the ever-burgeoning need for healthcare and the shifting disease burden, the introduction of the proposed National Health Insurance Scheme stands to precipitate a further wave of growth.”

Notwithstanding present ambiguities as to the rollout of the National Health Insurance Scheme in South Africa, the medical device market is projected to expand by an 8.6% compound annual growth rate over the next five years, demonstrating the need for enhanced reach and healthcare delivery in the South African market. “Beyond our interest in the kind of expansion both latent and possible in public healthcare, the possibilities for effecting noteworthy impact in the combined market are exciting and hold the promise of enhancing the competitiveness of a local company,” says Shezi.

The product range supplied by SA Biomedical is considerable – spanning the supply of knee, hip and shoulder implants, through to fracture plates, anchors, screws and surgical instruments – in addition to supporting peripheral product ranges which further complement the core ranges.

“Our existing client base and target market comprises highly skilled surgeons including orthopaedics, neurologists, vascular, plastic and maxillo facial specialists,” explains Bisset. “We are positioned to develop and maintain lasting relationships via our extensively trained sales staff, populated with qualified biokineticists and kinesiologists.”

Via four primary divisions – Arthromedix, Advanced Orthopaedics, NeoSpine and Prime Surgical – the company places high emphasis on medical education through the provision of detailed product support in addition to training at state of the art wet lab facilities, within its customer service offering. “The plasticity offered by the existing operating model ensures responsiveness to the market, whilst the inherent characteristics of our global partners afford us access to product and procedural innovation,” notes Bisset.

“Significantly, the key skills held by the current staff complement and management will be retained,” notes Sefolo. “We project substantial strategic benefit – and have much appetite for further investment in the healthcare industry.”