Spectrum Plastics Group: Why the merger took place

The M&A deal creating Spectrum Plastics Group is but the latest in a wave of consolidations taking place among medical device industry outsourcers.

Mauricio Arellano, president of Spectrum’s medical division, thinks 2 trends are driving the consolidations: the need of OEMs to provide truly disruptive innovations to meet health providers needs for value-based care, and the desire of OEMs to optimize what has been a fragmented and suboptimal supply chain.

“The medical device industry has gone through profound changes in recent years, affecting the way OEMs view and partner with outsourcing companies,” Arellano said today in a podcast interview with MDO.

By acquiring specialty plastics manufacturer Pexco and merging it with its PPC Industries holding, private equity giant Kohlberg & Co. was able to create a medical device industry supplier with far more capabilities.

When a merger such as the one creating Spectrum takes place, it is important to be as open as possible with customers, Arellano said.

“We’re engaging with those strategic accounts, and making sure we have the conversations now, and that we understand their concerns and how to address them,” Arellano said. “It’s a truly compelling-win-win all around, and we will hold ourselves accountable to that.”

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