CASE STUDY: SUROS
Invested: July 2004
Location: Indianapolis, IN
Exited: Acq., Hologic
Purchase Price: $240 million, plus a two year earn-out
Business Description: Leading manufacturer of vacuum-assisted breast biopsy and tissue excision device compatible with multiple imaging modalities. Suros competed against several large medical device companies, including Johnson & Johnson; through a combination of stronger technology and a management team focused on sales growth and penetration, Suros took a strong foothold in the breast-biopsy market in the years following its founding in 2000.
River Cities Role: River Cities management identified Suros in late 2003 as a potential investment candidate. Following several months of diligence, River Cities led the Company’s first institutional round alongside two co-investment partners. Once closing the deal, River Cities played a leading role on the Compensation Committee and assisted in the growth of the company to over 100 full-time employees.
Value and Exit: River Cities sold the company in 2006. With 80%+ gross margins and a growing stream of recurring disposables business, the Company grew revenue by 400% from 2003 to 2006. In July 2006, Hologic, Inc. (NASDAQ: HOLX) acquired Suros for 11.5x trailing twelve month revenue; the purchase price was $300 million.
* * *
“In my book, River Cities is the definition of a true partner that added much more than financing to Suros. We are pleased to continue our relationship with River Cities in our newest venture, Nico Neuro. They continue to be instrumental to our business and their investment with valuable coaching, resources and a willingness to focus on the goal of creating a successful enterprise.”
– Jim Pearson, past CEO Suros Surgical, current CEO Nico Nuero & Spine