On September 23rd, Steady Medical officially announced the successful acquisition of 75.2% equity in Global Resources International, Inc. (GRI) for approximately $120 million (approximately RMB 840 million) in cash.

The first international controlling stake acquisition project of Steady Medical has landed, and low value consumables leader Whale Swallows Global Medical Consumables Giant GRI has opened up a new growth point for Steady Medical overseas.

Borrowing a ship to set sail, entering a new stage of global production
Founded in 1991, Steady Medical achieved coordinated development in the medical and consumer sectors through two major brands, "Winner Steady Medical" and "Purcotton Era". On September 17, 2020, Steady Medical officially listed on the ChiNext board. Over the years, Steady Medical has continuously innovated and expanded its industry boundaries, covering multiple fields such as healthcare, personal care, home care, maternal and child care, and home textiles and apparel. Its products have obtained EU CE certification, US FDA certification, and Japanese Ministry of Health and Welfare certification.

In 2022, Steady Medical acquired Zhejiang Longtai Medical, Guilin Latex, and Hunan Ping'an Medical Equipment, and now has 30 wholly-owned and controlled subsidiaries at the first and second levels. And Steady Medical also has a professional R&D team that combines theory and practice, and has established a medical grade quality management system early in the industry and passed ISO13485 medical device quality management system certification.

Currently, Steady Medical Dressings are sold in over 110 countries worldwide. As of December 31, 2022, 76 invention patents, 662 utility model patents, and 349 design patents have been obtained domestically; Obtained 54 invention patents and 8 utility model patents overseas.

GRI is also a strong global medical consumables and industrial protection enterprise, with revenue exceeding $150 million in 2023. Revenue is classified by region, with the United States accounting for about 70%, Europe 20%, and Asia 10%; Classified by business, sales of medical consumables account for approximately 55%, sales of industrial protective products account for 20%, and other contract processing accounts for 25%; The main products include surgical bags, drapes, drapes, containers, surgical gowns, and industrial protective clothing.

This acquisition of GRI is the first and largest overseas acquisition in the pharmaceutical industry since H2 2024. On September 20th, Steady Medical completed the GRI equity delivery procedures and has paid the full transaction consideration of approximately $120 million in accordance with the agreement.

After the acquisition, Steady Medical acquired 75.2% equity of GRI through its wholly-owned subsidiaries, including Tianjian Development (Hong Kong) Limited, Tianjian's wholly-owned Delaware subsidiary, Steady US's wholly-owned Delaware subsidiary, Steady Delaware's wholly-owned Georgia subsidiary, and Victory Genesis' wholly-owned Georgia subsidiary (hereinafter referred to as the "merged subsidiaries"), in cash.

After the delivery is completed, the merged subsidiary will be absorbed and merged into GRI, and will be deregistered, with GRI as the surviving company.

What is the response plan for overseas mergers and acquisitions and the "301 tariffs on China"?
For Steady Medical, the acquisition of GRI is of great significance, as it is an important step towards its global strategic direction and a milestone. Steady Medical can leverage the labor cost advantage of its global production base and its response speed that is close to the trends of the European and American markets, greatly enhancing its ability to respond to changes in international trade. In addition, Steady Medical has a complete localized and excellent operational system in the United States and Europe, which enhances the global competitiveness of the enterprise.

From the performance of Steady Medical, it can also be seen that the addition of GRI is a new growth point for Steady Medical. In terms of performance, Steady Medical has performed relatively averagely in recent years, with a revenue of 8.185 billion yuan in 2023, a year-on-year decrease of 27.89%; In the first half of 2024, the revenue was 4.03 billion yuan, a year-on-year decrease of 5.5%, but the reason for the decrease in revenue is that it is digesting the cooling performance after the epidemic.

In addition, in the direction of medical consumables business, the steady decline in medical supplies is more obvious, with medical consumables revenue of 1.72 billion yuan in the first half of 2024, a year-on-year decrease of 20.9%. Medical consumables are a key member of Steady Medical's revenue banner, accounting for 43% of the company's overall operating revenue. Therefore, for Steady Medical, how to increase revenue from medical consumables has become a top priority.

The addition of GRI can further expand into new markets for Steady Medical, enter the European and American markets, and increase overseas revenue. In the announcement, Steady Medical also mentioned that the United States is one of the world's largest sales markets for medical consumables. Through this acquisition, Steady Medical will be able to enhance its localized operational capabilities in the US market, thereby expanding its business scale in North America.
It is worth noting that on September 13th, the Office of the United States Trade Representative (USTR) announced the final implementation measures for the "301 tariffs on China". The "301 tariffs on China" mainly involve electric vehicles, batteries, semiconductors, steel, aluminum, key minerals, solar cells, shore cranes, and medical products. Among them, medical products mainly involve low value medical consumables, including syringes and needles, medical masks, personal protective equipment such as some respirators, and medical rubber gloves.

And these have a high degree of overlap with products under the umbrella of Steady Medical and GRI. The version officially implemented this time has once again increased the tariff rates on some products based on the documents from May before. The low value consumables related to this merger include:
 Surgical and non-surgical respirators and masks: (first increase) tariff increased from 7.5% to 25%, effective September 27th; (Second increase) The tariff will increase from 25% to 50%, effective from January 1, 2026;
 Rubber medical and surgical gloves: (first increase) tariff increased from 7.5% to 50%, effective January 1, 2025; (Second increase) The tariff will increase from 50% to 100%, effective from January 1, 2026;
 Disposable textile masks: (first increase) tariff increased from 7.5% to 25%, effective from January 1, 2025; (Second Increase): Tariffs will increase from 25% to 50%, effective January 1, 2026.

The further increase in tariffs has a profound impact on the competitiveness of local machinery companies in the US market, and export orders will undoubtedly decrease sharply. Domestic enterprises will also have to find new ways out.

Source: https://news.yaozh.com/archive/44263.html