Cimtek Medical Company, a major provider of vertical e-commerce solutions to the medical supply industry, has secured $11 million in equity capital from ABS Capital Partners and Union Street Partners. The company has developed Medicalbuyer.com, that is the only Web site of its kind to offer physicians and hospitals an on-line, one-stop shopping alternative for their medical supplies.
Estimated to become a $35 billion market, the medical supply industry is plagued by inefficiencies and constraints that cost health care providers, distributors and manufacturers nearly $11 billion in potential savings, according to EHCR, the Efficient Health Care Response Consortium. Currently, to order medical supplies, doctors rely primarily on paper-based catalogues, while the majority of hospitals must pay to become members of group purchasing organizations (GPOs). GPOs serve to pre-select products and distributors and require hospitals to purchase inventory predominantly through their catalogue.
These approaches are not only inefficient, but also limit customer savings and distributor access to a vast health care market. Medicalbuyer.com now offers hospitals and doctors a less expensive, quicker and far better way to purchase medical supplies, displaying thousands of medical products with competitive, comparative prices at 15 to 50 percent discounts, all on one Web site. Reaching almost 500.000 doctors, 7000 hospitals, 17.000 long-term care facilities and 10.000 home health organizations, Medicalbuyer.com brings down costs and provides fast, free access for buyers and sellers of medical supplies.
The early entry into the on-line medical supply market has allowed Cimtek to attract an all-star investor team and add the financial resources required for aggressive market share growth, according to Dr. Edward Rollins, chairman and CEO of Cimtek Medical. The goal is to make catalogue purchases and inflated prices for medical supplies a thing of the past through the use of the latest e-commerce technology. Cimtek Medical already has the first phase of Medicalbuyer.com available for immediate and secure business-to-business transactions.
With the new financing, the company plans to expand its world-class design team, accelerate product availability, make continual improvements to the Web site and fund expanded sales and marketing activities for rapid market penetration. First-round investors ABS Capital Partners and Union Street Partners have significant early-stage and public company equity experience and an impressive set of active advisors. Nashville-based SunTrust Equitable Securities served as the exclusive financial advisor to the company in this transaction.
Medicalbuyer.com is replacing old-fashioned purchasing inefficiencies in the medical supply industry with an innovative Web-based approach which will revolutionize the health care industry, as stated by Frederick Bryant, general partner of ABS Capital Partners. He believes that Cimtek Medical possesses significant competitive strengths as a health care e-commerce business, that includes a market leading base of Internet technologies. As a result, Cimtek has a significant early-mover advantage within a vast market of opportunity, as Duncan Dashiff, the director health care investment banking at SunTrust Equitable Securities claims.
ABS Capital Partners is a private equity fund which has offices in Baltimore, Nashville and San Francisco. ABS invests in growth companies primarily in technology, health care, media and communications, and business services industries. ABS makes privately negotiated equity investments through the use of recapitalizations, acquisitions and expansion financings of companies in specific industries. The general partners have significant experience that back promising management teams and help them achieve their business goals.
Union Street Partners is an investment partnership affiliated with SunTrust Equitable Securities, the investment banking firm that provided financial advisory services for this transaction. Cimtek Medical Company is a major leading provider of vertical e-commerce solutions to the medical supply industry. Founded in 1997, Cimtek Medical is working with manufacturers, distributors, dealers and other industry participants, including the Health Industry Distributors Association, in order to deliver sophisticated "infomediary" services and e-commerce solutions throughout the medical product distribution chain.
Medicalbuyer.com which is a service of Cimtek Medical Company, is a virtual medical marketplace offering several related e-commerce services to buyers and sellers of health care supplies and equipment. MedicalBuyer.com is open to manufacturers, distributors, dealers and end-users from the large integrated delivery networks to individual medical office practices as well as consumers. Services include an open Internet marketplace which displays thousands of medical products with competitive, comparative product prices at 15 to 50 percent discounts. The future services will include a customer-initiated "reverse" auction buying market and an auction-based clearance market, allowing distributors, dealers and home care companies to sell overstock inventory through a worldwide, open auction.