) recently announced that it has acquired Affinity Medical
Technologies LLC, a manufacturer of customized medical interconnect
products. The financial terms of the deal were not disclosed.
Costa Mesa, California-based, Affinity Medical Technologies'
product line includes cable assemblies, connectors and electronic
interfaces for medical device manufacturers. The company offers
high quality products, which are used in almost every area of
medical monitoring that complements Molex's product line
beautifully, while enabling it to expand into the medical
Despite this product depth, Affinity has smaller scale than
Molex, so the latter's geographical reach is expected to help the
combined company grow faster. To Affinity's credit, it does have a
good client base and solid relationships that Molex expects to make
the most of.
Management stated that Affinity Medical Technologies will now
operate as a subsidiary of Molex and will be a part of the
company's Cable Products Group within the Global Integrated
The medical electronics sector is a complex and fragmented
market. The interconnect technology segment in particularis one
where product differentiation too extremely difficult, so the
dangers of increasing competition and market share losses are
omnipresent. Since growing an interconnect technology business is
rather difficult, companies in the segment often resort to
acquisitions to expand into an adjacent area with good growth
potential. Molex's acquisition of Affinity should help the company
in this respect.
Currently, the medical electronics market is valued at
approximately $128.6 billion, and is expected to reach a market
size of about $191.1 billion by 2015, according to the data
released at the Medical electronics web conference held in
Molex is a leading supplier of electronic and electrical
components. The company is also a major player in the connector
market in particular, where it has close to a 5% market share. The
company's fourth quarter 2012 revenue was $858.5 million, up 2.6%
Increasing competition from
Methode Electronics, Inc.
TE Connectivity Ltd.
) remain as strong as ever.
Molex has a Zacks #4 Rank, which implies a Sell rating in the
short term (1-3 months).
AMPHENOL CORP-A (APH): Free Stock Analysis
METHODE ELECT-A (MEI): Free Stock Analysis
MOLEX INC (MOLX): Free Stock Analysis Report
TE CONNECT-LTD (TEL): Free Stock Analysis
To read this article on Zacks.com click here.