Great hip action boosts Corin
PUBLISHED: 10:14 18 January 2013 | UPDATED: 22:38 20 February 2013
As Corin faces a £multi million takeover bid, we put the company under the spotlight
Great hip action boosts Corin
As Corin faces a multi million takeover bid, we put the company under the spotlight
Corin might be considered a small player in the 14 billion dollar global orthopedic implant market, and a small or medium-size enterprise thanks to peculiar British and EU business classification criteria, but since it was established in 1985, this 50 million turnover Cirencester business has been a Cotswold export success story.
Double digit sales growth (12 per cent in 2011), including 35 per cent growth in its most recent new hip replacement portfolio, over 15 per cent of its entire sales are now in the US market, up from almost zero just four years ago, and exports of over 80 per cent of products worldwide.
The company is also a major employer in Cirencester, employing 220 people across its two sites in the town, and by the time you read this, it could well have new owners.
As we go to print Corin is under offer from a brand new company, 2IL, which has seen its potential and put in a bid of 30.5 million. Employees have been told that there are no plans to close or move the sites elsewhere. Commenting on the Offer, Linda Wilding, Chairman of Corin said: Corin has significantly invested in and successfully developed a range of new and revised hip and knee products. It now has a comprehensive product portfolio showing good organic growth that has substantially reduced the Groups historical reliance on its metal on metal products. The Group is now successfully competing on the world stage but in an industry dominated by much larger players, lacks the necessary scale to leverage its investments and operational infrastructure.
In fact, if the offer by 2IL goes ahead, though it is by no means certain as we go to press, it could be good news for the business which designs and manufactures high quality hip and knee implants, all of which takes significant precision engineering input.
The potential buyer, 2IL, is not one of the bigger orthopedic companies such as Zimmer or Smith and Nephew, either of which could easily have bought out the smaller company, absorbing it into a huge corporate structure and closing down the Cirencester manufacturing base. 2IL is led by a group of industry professionals who evidently know a good deal when they see one.
Over the last four years, Corin has invested heavily in research and development, under CEO Peter Huntley, who joined from Smith and Nephew in London where he was based for ten years, leading on strategy and business development.
I really believe that small orthopedic companies have a purpose, he said. They are more innovative than the bigger companies which are slower to develop new products because they already have millions of pounds worth of inventory sitting in hospitals worldwide for surgeons to use. Changing that requires a major corporate initiative and its very expensive.
He goes on: Smaller companies like Corin can bring out new products for less because they can react more quickly, though there are still significant regulatory burdens on our industry which we all have to meet, whatever the size of the business. If the 2IL deal goes ahead, Peter will step aside and a new managing director will take over.
Marco Fumagalli, Director of 2IL said: Peter began the task of turning Corin into an expanding medical devices business with a platform of fantastic modern products. We are delighted to be able to offer a growing future to the business and look forward to completing our offer and working with all at Corin to deliver our
So, how does a company such as Corin compete with the big boys? Orthopedics is a very conservative industry. Game changing products that will revolutionise the market take months, sometimes years, to bring to market. Innovation tends to be incremental based off the experience of surgeons, and Corin engineers taking the products forward to allow them more options. Its all about innovation and a very high level of service.
Under Huntley, the company planned to double its size within the next few years with the launch of a brand new range of knee products later this year (2013) which Corin hopes will match the success of the companys range of hip products launched two years ago.
The market for hip and knee replacements has expanded over the last 10-15 years and shows no sign of stopping. Patients are not only having them fitted younger because they are doing far too much (exercise), or far too little (obesity weight is a big determinant on how quickly joints wear out). The market has also expanded because the industry has come up with materials that last longer and surgeons are more confident about putting them into younger patients.
Fifteen years ago most hip replacements went into older people who were not very active, and in fact the average age for a hip or knee replacement is still around 70 years old. However, new polyethylene bearings are much stronger and longer lasting, and the design has improved so they dont wear out as quickly. Its all about harder wearing materials and better kinematics.
The key to Corin is that over the last few years it has introduced a much bigger portfolio of products covering a broader section of the hip and knee markets. Its Cirencester manufacturing base has capacity for the next three years, and bringing in new equipment and improving its systems could result in extending well beyond that.
Company founder Peter Gibson, who stepped down from Corin in 2003, still lives locally and takes an active interest in his former business which he built up from zero and floated on the London Stock Exchange in 2002. Is he sad that his baby could now be sold? Every business goes through changes and this is the latest in a company which still has massive potential in a growing market. I think the company is now in a new phase in its development.
Five minutes with...
...one of Corins original employees: Senior Product Development EngineerDavid Fletcher.
When did you join?
I started on 5 August, 1985, as a skilled machinist aged 26. The first factory was in Watermoor, Cirencester, in what is now Kwikfit Tyres next to the fire station.
How has your job evolved?
When we moved to the present factory in Love Lane in 1993 I came into the offices as Corins first draughtsman. At the moment Im working as a product system engineer in the Product Development team. My responsibilities are for the design and development of selected hip prostheses.
Youre number 6 on the payroll? What happened to the others?
I was actually the eighth person to start so Im not sure why Im number 6. Of the previous seven who were here before me, three retired from Corin, Im not sure what the other four are doing now.
Why have you stayed at Corin?
The variety of work and the knowledge that we are changing peoples lives by giving them back a good quality of life.
What are you most proud of in your career at Corin?
In my time in Product Development I have been involved in designing and bringing a wide selection of products to market: three hip systems MiniHip, TaperFit and Panatomic, Zenith ankle, the Oxford Modular Shoulder and two spinal systems Trinity Polyaxial and Cervive cervical plating system. I have also worked on some of our knee prostheses and certain trauma products. I have about 12 patents to date with my name on.