Medical Device Link.

IVD Technology Magazine | IVDT Article Index

Originally published May, 1997

Consolidation bug hits filtration suppliers

Is the merger between Pall Corp. and Gelman Sciences a marriage made in heaven? Analysts who have chronicled the two companies certainly seem to think so.

"Pall has filters, Gelman has membranes. Together, they can walk in to a customer and say, 'We can serve you from soup to nuts,'" observes Elliot Schneider, who produces an investment newsletter, Perspective Research, for the brokerage firm of Gruntal and Company, Inc. (New York City). He speculates that the new firm's marketing department will seek to broaden the company's offerings into "just about any kind of precision filtration system."

Pall brings a wide ranging product line to its merger with Gelman Sciences. Here, a Pall researcher applies a capture zone to a lateral flow membrane.

The merger between Pall Corp. (East Hills, NY) and Gelman Sciences (Ann Arbor, MI) is typical of a trend in corporate matrimony--different industry strengths are brought to the altar. Gelman Sciences, for instance, has as its strong suit the company's pioneering membrane and microfiltration devices. But it lacks Pall's broad product base. Pall, on the other hand, has clinched industrial and health-care lab business with its diverse filter and separation technologies. Still, it's "not known as the world's best salesman," Schneider relates.

Now, Pall will enjoy the benefit of Gelman's marketing spunk, while Gelman will become part of a more far-flung operation.

"You're going to see more of this," predicts Rod Lache, an analyst who follows filtration for Deutsche Morgan Grenfell (New York City). "There is going to be more of this kind of consolidation in this industry, where companies are becoming 'full service.'"

Even now, Pall Gelman Sciences is far from alone. Other companies are also marrying filtration systems to other product lines via mergers. This spring, Healthcare Technologies, Ltd., the parent company of Diatech Diagnostics, Ltd. (Cambridge, MA), is set to acquire the Dutch-based Gamidor Companies, a union that is reminiscent of the Pall-Gelman combination. Gamidor deals in specialized lab systems such as filters and membranes, and is known for its marketing track record. Healthcare Technologies has a stellar reputation for R&D support.

Meanwhile, Millipore Corp. (Bedford, MA) is busy acquiring Tylan General (San Diego), a leading supplier of precision mass-flow controllers to the microelectronics industry. In announcing the acquisition, C. William Zadel, Millipore's chairman and CEO, commented that the inclusion of Tylan will help "accelerate R&D" and enable the partners to "develop integrated products."

The expansion plans by Millipore, a company widely regarded as Pall Gelman's closest competitor, don't worry Jason Alter, PhD, marketing manager for the Pall Gelman OEM membrane business team.

He points out that Pall Gelman already has quite a leg up on some of its competition, thanks to the merger. On the horizon is the concept of bundling together some of the partners' similar technologies to "cover more bases." By combining blood-separating systems from both former companies, Alter says, the new company hopes to garner 70% of that technology's market.

In February, the company announced the first product to hit the market under the new company moniker: the Predator membrane. Expected to significantly displace the use of nitrocellulose membrane in the manufacture of lateral-flow or immunochromatographic assays, Predator got company officials off to an upbeat start at the Medical Design & Manufacturing West 97 show, held in Anaheim, CA, in February. A widely circulated letter from Eric Krasnoff, chairman and CEO of Pall Corp., touted the new company as the one with "the strongest sales, technical, and manufacturing organization within our industry."

Alter concurs: "No one really comes close to us anymore. This merger just widened the gap between us and our competitors."--Anne Scheck