Welch Allyn says lighting divestitures were strategic moves
CNY Business Journal (1996+), May 28, 2010 by Tampone, Kevin
SKANEATELES FALLS – The sale of two Welch Allyn lighting product lines announced May 21 doesn’t mean the businesses weren’t performing well.
“In fact, sales this year look pretty good,” says Steve Meyer, president for U.S. and Canada and executive vice president at Welch Allyn. “It was just a matter of trying to find the best place for these technologies.”
Welch Allyn, which manufactures medical devices, sold its surgical-headlight business to New Jersey – based Integra LifeSciences Corp. and its specialty metal halide product line to Ushio America, Inc. of Cypress, Calif.
No financial terms were disclosed. The halide product line includes high intensity industrial lamps like those used for overhead lights in airplane cabins.
The sales were a result of a new strategic plan Welch Allyn put in place three years ago, Meyer says. The company decided to focus squarely on diagnostic medical devices and particularly on those used in frontline medical care, which Meyer notes has historically been the firm’s overall focus.
That business includes items like patient monitors, various diagnostic scopes, and blood-pressure products.
“It’s just that over the years there have been a lot of permutations in the business as we have grown that have sent us in a lot of different directions,” Meyer says.
Welch Allyn sold its Everest VIT subsidiary to GE Inspection Technologies for an undisclosed price in 2005. The unit manufactured items like flexible cameras and light sources used in industrial inspection
GE Inspection Technologies later built a $12 million, 65,000-square-foot building in Skaneateles Falls to house the former Everest unit.
In 2008, Welch Allyn stopped making defibrillators through a strategic partnership with Chelmsford, Mass. based Zoll Medical Corp. (NASDAQ: ZOLL).
Even earlier, the company spun its barcode scanner business into a separate company, Hand Held Products, in 2000. Honeywell International (NYSE: HON) acquired Hand Held in 2007 for $390 million.
Turning Welch Allyn’s full focus back to medical products will allow it to compete more effectively and gain a better position in the marketplace, Meyer says.
In addition to the lighting sales, Meyer says the company’s April acquisition of Trimline Medical Products Corp. of Branchburg, NJ. reflects its focus on frontline care. Trimline produces blood pressure cuffs and accessories, gauges, and stethoscopes.
Welch Allyn is transferring Trimline’s manufacturing operations to its own sites in Skaneateles Falls and Mexico. The move will create 35 new local positions.
Meyer declined to comment in detail on other potential acquisitions or divestures Welch Allyn may explore.
“Like any business our size, we’re always looking at making sure we have the right focus and the right people in the right places to deliver the highest value,” he says.
About 130 people work in the lighting businesses the company sold, says Jamie Arnold, a Welch Allyn spokesman. The firm expects to retain about 95 percent of those workers and redeploy them elsewhere in the business.
Those that lose their jobs will receive severance packages and help finding a new position.
Welch Allyn’s medical-office lighting and LED based lighting businesses will continue. The production of Welch Allyn specialty halogen lighting products will also remain fully operational, according to the company.
Those businesses include lights used in the company’s diagnostic devices, making them a strategic fit, Meyer notes.
Founded in 1915, Welch Allyn employs 2,500 people in 26 countries, including 1,200 locally