When Mortara Instrument CEO Justin Mortara discussed the future of the company with BizTimes in August, he pointed to the company’s new facility and local supply chain as an extension of the company’s commitment to Milwaukee.
Investing in a building with features like heating and cooling powered by a geothermal system; a “blue roof” that pools water and releases it in a controlled fashion, eliminating the need for a retention pond; porous asphalt; and LED lighting was part of taking a long view, the chief executive officer said.
“But nothing that we do here is looking out 90 days; it’s always looking at the multi-year horizon,” Mortara said in August.
That made the decision to sell the company to Chicago-based Hill-Rom Holdings Inc., a public company where the desire to look at a longer-term horizon and remain committed to Milwaukee could run into conflict with the need to provide shareholder value, an interesting one. The $330 million cash deal is expected to close during the current quarter.
But Mortara, who will remain with the company when it becomes part of Hill-Rom, said Tuesday the deal will allow the company to continue its work of developing health care products that can help save lives. Not only that, but joining Hill-Rom will allow Mortara to accelerate its growth.
“We are really passionate about growth because as we grow our business, we impact more lives,” he said.
Mortara designs, develops and manufactures diagnostic cardiology and patient monitoring solutions. The company had revenue of about $115 million in 2016 and a compound annual growth rate around 4 percent in recent years.
During a J.P. Morgan Healthcare Conference Tuesday, Hill-Rom president and chief executive officer John Greisch said he believes Mortara will be able to grow that figure as part of Hill-Rom by leveraging existing sales channels and a larger international footprint.
Greisch also said he expects to be able to realize about $10 million in operational cost synergies with Mortara, which he said wouldn’t be insignificant for a company of its size.
“We think we’ve got a very attractive purchase prices for this business,” he said.
Anytime the word synergy is raised in connection to an acquisition, it can easily raise concerns about what it will mean for the acquired company’s operations. Mortara said it’s fair to raise those questions, but he’s confident Milwaukee will remain Mortara’s headquarters.
“Just ask my wife, I’m not going anywhere, this facility is not going anywhere,” Mortara said.
It might be too early to say exactly what the accelerated growth from the deal could mean in terms of jobs in Milwaukee, but the company previously said it hoped to add 150 jobs over five years. As of August, Mortara had 229 employees in the city and a total of 422 around the world.
“The best thing we can do for Milwaukee is the same thing Mortara Instrument has been doing as a standalone company,” Mortara said.
The sale process started out with all options on the table, he said, including the potential for Mortara to make acquisitions or go public on its own. The goal was to accelerate the company’s growth, but Mortara said he didn’t want to do that at the expense of company culture or its focus on cardiology.
“Hill-Rom turned out to be a perfect fit, he said.