By Maureen Flanagan
The Hygenic Corporation, based in Akron, OH, manufactures and markets latex and rubber products for therapy, fitness, healthcare and specialty markets. The company's Thera-Band® exercise bands and tubing command a leading market share and are the most widely recognized therapy and rehabilitation products. Hygenic Corp. has successfully adapted Thera-Band® products for fitness applications and continues to build its market leading presence in its healthcare and specialty manufacturing market segments.
In January 2004, Hygenic was purchased by Baird Capital Partners (BCP), a division of the Private Equity Group at Robert W. Baird & Co. In support of the BCP buyout, American Capital Strategies, Ltd. (Nasdaq: ACAS) invested $22.75 million of senior secured subordinated notes and preferred and common equity.
"Hygenic's Thera-Band® brand is the preeminent brand in physical therapy products. The company maintains a strong position in the product categories in the markets in which it competes: the physical therapy, healthcare, dental and industrial market segments," said American Capital Managing Director Tom Gregory. "Hygenic's strong financial performance and sophisticated new product development and introduction capabilities form the basis for exciting opportunities for worldwide growth."
Hygenic got its start in 1925 in Port Huron, MI, as a manufacturer of hard rubber (vulcanite) for dentures. The company developed other latex and rubber products for industrial applications, developing proprietary technology in the process. During the 1970s, Hygenic expanded into the therapy and healthcare markets with Thera-Band® resistive exercise bands. Numerous successful product initiatives for these markets have solidified the company's market leading position and continue to create opportunities for growth.
The company's Thera-Band® products include resistive bands and tubing, exercise balls, soft weights, and hand exercisers. Easy to use and transport, Thera-Band® products provide an alternative to conventional weights, high-priced exercise machines and exercise programs. Hygenic has also created the Dyna-Band® brand of fitness exercise bands and tubing targeted to fitness centers, aerobic exercise groups and home fitness programs. The company offers paraffin heat therapy products under the Parabath® name and the AquafinsTM line for the emerging aquatic therapy market.
Hygenic has also developed leading products for the healthcare and specialty manufacturing markets. These include hospital supplies such as disposable tourniquet straps and medical and laboratory tubing. Indeed, the company's tubing for sanitary soap dispensers enjoys a commanding market share. The company also manufactures the dental dams used by dentists and oral surgeons as a separator in oral surgeries and other endodontic procedures. Hygenic's dental dam line, which leads the market, was sold in 1996 to Colt�ne/Whaledent. Under a long-term agreement, Hygenic continues to be the exclusive supplier of the product.
In addition to American Capital's financing in BCP's buyout of Hygenic, Antares Capital Corporation and Madison Capital Funding LLC provided a revolving credit facility, senior term loans and invested in preferred and common stock. BCP, as the majority owner, and Hygenic's management also made equity investments.
For more information about American Capital's portfolio click here. Since 1997, American Capital has invested over $2 billion in more than 100 middle-market companies.
Hygenic operates in robust and steadily growing markets. As the number of physical and occupational therapists progressively increases, the company's market is anticipated to expand, driven by the growing elderly population and a greater recognition of the benefits of physical therapy as part of patient treatment. A greater number of injuries resulting from the "week-end warrior" effect as well as advances in technology that make therapy products more comfortable are also expected to add to market growth.
Hygenic's brand strength, product quality and customer responsiveness far outstrip the competition. The company has manufacturing capabilities that produce a higher quality product with tighter tolerances than those of its competitors. In 1995, the company further enhanced its manufacturing operations by establishing a facility in Malaysia to take advantage of favorable costs of labor, supplies and raw materials.
Exercising its brand strength and market muscle, Hygenic continues to grow stronger with every passing day.
