TriStar Wellness Solutions, Inc. (OTCBB: TWSI), a health and wellness company that targets opportunities in the self-care and professional marketplace, has acquired HemCon Medical Technologies Inc., a Portland, Oregon-based leading researcher and manufacturer of products for bleeding and wound management. TriStar purchased all the stock of HemCon for $3,075,000 in cash. Effective immediately, HemCon will operate as a wholly owned subsidiary of TriStar.
HemCon, founded in 2001, had revenues in 2012 of $6.5 million. Its world-class manufacturing facility had received funding from the U.S. Department of Defense to develop a hemorrhage-control bandage that became standard-issue for U.S. soldiers fighting in Iraq and Afghanistan. In addition to its Portland facility, HemCon also has facilities in Ireland and the Czech Republic.
The stock acquisition consisted of the entire medical device business. TriStar has filed a form 8-K with the Securities and Exchange Commission that contains further details of the transaction.
Barry S. Starkman, age 56, will retain his current position as President and Chief Executive Officer of HemCon while also assuming the role of Senior Vice President of TriStar. He will be based at HemCon's manufacturing facility in Portland, and will report to John Linderman, President and CEO of TriStar Wellness Solutions.
John Linderman elaborated on the importance of this acquisition: "With its world-class global operations and healthcare technology assets, HemCon represents a tremendous opportunity for growth. HemCon will become the platform from which to launch TriStar's plans to grow its consumer and professional wound care portfolio and become a key player in the $17 billion global wound care market. HemCon's products, technologies and best-in-class manufacturing capability will enable the company to grow market share through innovations designed to meet the needs of underserved consumer and professional markets."
Mr. Linderman continued, "HemCon provides TriStar Wellness Solutions an ongoing revenue base with significant near- and long-term growth potential. Now that it is part of TriStar, we plan to implement strategies to leverage HemCon for aggressive commercial success across a broad range of innovative technology applications within the U.S. and global markets. We expect to refocus the impressive HemCon organization on rebuilding its core professional/surgical and emergency medical market customer base and to penetrate new consumer markets with innovative new products that are currently in development.
"The HemCon acquisition enables TriStar's plans to build a major healthcare products company focused on addressing unmet or under-met consumer and healthcare professional needs. In the past year, TriStar has been focusing on acquiring new technologies and assets; now with HemCon, we have a platform to more rapidly bring these assets to the marketplace," he added.
Mr. Starkman commented, "With our acquisition by TriStar Wellness Solutions, we are looking forward to launching an important new phase in the HemCon story. Under TriStar ownership, HemCon will continue its mission to provide medical practitioners worldwide with the highest-quality, most cost-effective solutions to bleeding and wound care in all medical settings, from the emergent trauma through the OR to post-surgical care, and to continue to provide quality products for the OTC market."
HemCon, aided by funding from the U.S. Department of Defense, developed a process for incorporating chitosan, a substance found in shrimp shells, into bandages that control severe bleeding and are naturally antibacterial. Between 2003 and 2008, the HemCon® Bandage was the standard-issue hemorrhage-control bandage for all U.S. Army soldiers and is credited with saving hundreds of lives on the battlefield in Iraq and Afghanistan. HemCon subsequently extended its technologies into a diversified product line for the emergency medical, surgical, dental, military and OTC markets in the U.S. and globally.
HemCon's premier product lines include GuardaCareXR Surgical Hemostatic Temporary Surgical Dressing, a chitosan-coated gauze with an x-ray detectable element indicated for the temporary control of severe bleeding; ChitoGauze®, an easy-to-apply dressing for the military market that maximizes the limited time before massive blood loss turns deadly; GuardaCare®, an emergency medicine variant of ChitoGauze®; the HemCon Patch®, designed for bleeding control following heart catheterization procedures; the HemCon Dental Dressing, designed for use by oral surgeons and general practitioners to protect oral mucosal tissues following various procedures; and various products incorporating m•doc™ oxidized cellulose for the OTC market. Not included in the acquisition is HemCon's freeze-dried plasma development program, which was spun off from the company.
Dennis McNannay, Executive Director of the Oregon Bioscience Association, noted, "Oregon Bio welcomes the news that HemCon, a local, innovative industry leader, is transitioning its business platform. HemCon has not only been a significant contributor to the Oregon economy, but also an essential catalyst to Oregon's innovation culture, rich entrepreneurial history and the region's bioscience community. We're excited for HemCon to begin this new chapter in its history."
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