Hip-hooray as Enztec walks tall
Recession or not, surgical instrument company Orthopaedic Synergy has raised US$6 million (NZ$10.3m) to expand its Christchurch business Enztec and increase staff by 15.
It is also planning a public listing later this year or early next when market conditions have improved.
Orthopaedic Synergy was formed late last year as a holding company for joint venture partners Enztec and United States-based OMNI life science.
It was the first New Zealand majority-owned full-service orthopaedic company in the New Zealand and Australian market.
The US$6m capital raising has just closed, after receiving US$4.8m from New Zealand venture capital investment fund Pioneer Capital Partners and another US$1.2m from new and existing shareholders.
Orthopaedic Synergy is 73 per cent owned by New Zealand shareholders including Auckland investment firm Birnie Capital Partners (formerly FR Partners), whose managing director is Bill Birnie, a former executive at 1990's high-flying investment bank Fay Richwhite.
Orthopaedic Synergy chief financial officer Stephen Norrie said the money would be used to build up Enztec's inventory and fixed assets.
Both Enztec and OMNI have experienced big growth this year, with Enztec expecting a 30 per cent increase in sales and turnover. It follows three years of 100 per cent growth which led Enztec to being named as the 27th fastest growing company in New Zealand last year by the Deloitte-Unlimited.
Norrie said he expected OMNI's turnover to almost double from US$15m to US$30m this year.
Enztec makes surgical instruments used in hip and knee replacement operations and OMNI designs and distributes hip and knee implants.
Enztec general manager Stephen O'Neill said he was adding a second shift and employing an additional 15 people to cope with the demand.
About a year ago Enztec has 32 staff and it now employs 43. It has outgrown its Sockburn base and has put some staff in another building across the road.
The company also outsourced about 50 per cent of its production to 15 businesses, mostly in Canterbury. O'Neill said Enztec operated in an industry that was relatively unaffected by economic downturns.
"People still need their hips replaced and the funding for that comes through insurance and government funding. It's not consumer driven."
The baby-boomer bubble was also coming through resulting in an increase of people needing new hips or knees.
About 95 per cent of Enztec's products were exported, with 54 percent going to the US. Australia, Europe and Japan were also sizeable markets.
Enztec was created in 1993 by Paul Morrison and orthopaedic surgeon James Burn, who still own shares in the firm.
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