Detailed analysis of assigned case, Cantel Medical, with supporting recommendations.

1. Cassie Mak, Kyle Nawrocki,
Jasmine Teu, Kyle Urban

2. Agenda
1. History
2. Today
3. Finances
4. Internal Analysis
5. External Analysis
6. SWOT
7. Issues
8. Brief Recommendation
9. Alternatives
10. Conclusion/ Q&A

3. History
“CANTEL MEDICAL IS A LEADING PROVIDER OF INFECTION PREVENTION
PRODUCTS AND SERVICES IN THE HEALTHCARE MARKET.”
1946-1985
W. Carsen & Company
Ltd.
Distributed camera and
optical instruments
Later expanded into furniture
before moving into medical
devices
2013-2016
Global Expansion
M&As continue, leading to
success in markets such as
China, Germany and the UK
1995
Medical Acquisitions Begin
Began in 1995 with
Medivators
Followed by Minntech, Biolab,
Mar Cor, Crosstex, Safe-T
Pack, & GE’s Water and more

4. Company Methods
ENDOSCOPY
Endoscopy procedure disposables include single-use valves and irrigation tubing. Medical device reprocessing systems,
disinfectants, detergents and other supplies are used to disinfect high-level endoscopes. This segment is operated through
MEDIVATORS.
WATER PURIFICATION AND FILTRATION
Water purification systems for dialysis facilities, including hemodialysis dialyzer and reprocessing systems, as well as sterilants
and filtration products. This segment is operated through Mar Cor Purification, Inc. and MEDIVATORS.
HEALTHCARE DISPOSABLES
Single-use, infection prevention products used primarily in the dental market including face masks, sterilization pouches, towels
and bibs, tray covers, saliva ejectors, germicidal wipes, plastic cups and disinfectants. This segment is operated through Crosstex
International, Inc.

5. Cantel Medical Today
Acquisitions
Segments Acquisitions Division
● Endoscopy
Water Purification and
filtration
Healthcare Disposables
● Dialysis
● Therapeutic Filtration
● Specialty Packaging
● Chemistries
● Minntech
● Biolab
● Mar Cor
● Crosstex
● Safe-T Pack
● GE’s Water and
Process Tech
● Medical innovation
group holding
● Medivators
● MarCor
● CrossTex
Key Market
● North America
(US & Canada)

6. Financials
2016 Financial Performance Highlights
● Revenue: $664.8 million, increase of 17.7%
● 15% US business growth
● 27.8% international growth
● International sales reached 22.5% of total revenue
● 2016 Year End Stock Price: 78.75 (26% increase from 2015)

7. Financials
Endoscopy (Medivators) Water Purification and
Filtration
(Mar Cor)
Healthcare Disposals
(Crosstex)
Dialysis (Mar Cor)
● 51% of Cantel sales
(2016)
● Up from 20% in
2009
● 49% of Cantel
operating profits
● 27% of Cantel
sales (2016
● Same as 2009
● 25% of Cantel
operating profits
● 17% of Cantel
sales (2016)
● Down from
25% in 2009
● 20% of Cantel
operating
profits
● 5% of Cantel sales
(2016)
● Down from 25%
in 2009
● 6% of Cantel
operating profits

8. Internal Analysis
Core Competencies:
Strength and success in strategic M&As - more than 30 acquisitions in very short time
High response to market needs
Ex: Crosstex swine flu SecureFit series
Lack of Organizational structure with 12 different ERP systems instead of 1 and limited
management
Clear market segments and product lines that directly address market needs
Cultural support to acclimatize with new acquired companies

9. External Analysis
Strong presence in North America
Brands with large market share
Ex: Mar Cor: 85% share of dialysis clinics, the largest segment
Success in global markets such as China, Germany and UK
Market leaders in certain categories
Ex: Rapicide & Endoscope Processing System
Rising Competitors
Ex: Amazon in wholesale distributions, Kimberly Clark in larger in hospitals

10. Porter’s Five Forces

11. SWOT
Strengths Weaknesses Opportunities Threats
•Well Established in
U.S
•Strong Patent
Portfolio
•High Barriers of
entry
•Skilled Workforce
•High industry
growth rate
•Unique products
•Heavily Rely on
Suppliers for Raw
Materials
•Regulation By
Governmental
Authorities
•Competitive market
•Possibility of high
loan rates
•High Investments in
research and
development
•Number of
Acquisitions
•Growth rates and
profitability
•New trends may
increase market size
•New technologies
are available
•Intense Competition
•Currency
Fluctuations and
Trade Barriers
•Government
regulations
•Changes in price
•Bargaining power of
suppliers is high

12. Issues
Should Cantel continue to expand globally?
● Already expanded to China, Germany, and UK successfully
through 5-Year Expansion Plan
Should Cantel create new product segments in urology?
● More opportunities in sterilization
● Dialysis market is expected to grow 3-4% annually in the U.S.
Should Cantel move towards disposable dialyzers?
● Mar Cor has used reusable dialyzers that require excessive
cleaning costs

13. Global Presence

14. Recommendations #1: Global M&A
Germany ● Cantel was well received in this market
● Second largest 65+ population
● 17M people 65+ making up 27.9% of the population
Italy ● Cantel acquired Italy-based International Medical Services
● 13.1M people 65+ making up 21% of the population
● 16M retirees by 2030
UK ● Cantel acquired Medical Innovations Group Holdings in the UK
● 11M people 65+ making up 17.5% of the population
● 14.6M by 2030
Expand further into Germany, Italy, and the UK

15. Recommendation #2: New Product Segments
Endoscope Cleaning Guide: https://www.youtube.com/watch?v=Z-gy6paVODs
Cystoscope Cleaning: https://www.youtube.com/watch?v=Qn95gpPpWGM
Current Segment: Endoscope Future Segment: Cystoscope

16. Recommendation #2: New Product Segments
● Cystoscopy- endoscopy of the urinary
bladder via the urethra using a cystoscope
● Used in
○ UTI
○ Blood in the urine (hematuria)
○ Cancer screening
● 4 million cystoscopies performed annually
● $4 billion per year is spent on bladder
cancer surveillance
Expand into Cystoscopies
● America’s 65+ population is projected to
nearly double over the next three decades,
from 48 million to 88 million by 2050.
● 617 million people worldwide are age 65+
● Projected number of people 65+:
○ 17% globally by 2050 (1.6 billion)
● Focus in Germany, UK, and Italy
Aging Population:
Growing Demand

17. Recommendation #3: Move to Disposable Dialyzers
● 5% of sales in fiscal 2016, down from 25% in 2009, and
6% of operating profits
● Challenging low-margin commodity market
● More cost effective to use disposable dialyzers
○ Costs of reusable dialyzers
■ Initially cost $10-$15 and can only be used
10 to 15 times
■ $1 per use
■ $3-$4 to clean each time

18. Alternatives
Cantel should continue to use
reusable dialyzers and work
to reduce cleaning costs
Focus on the current
endoscope reprocessing in
current markets
Cantel should reverse its
expansion efforts back
towards the US and Canada

19. Implementation
2
4
3
1 Identify Acquisitions
Complete M&A
Select Managers
Develop Corporate
Values
PHASE 1
• Identify potential additional acquisitions in
Germany, Italy, and the UK.
•Selection based on alignment with Cantel’s
product lines and core competencies
PHASE 2
• Facilitate R&D for cystoscope sterilization
products based on related product
components in current endoscopy sterilization
equipment

20. Implementation
2
4
3
1 Identify Acquisitions
Complete M&A
Select Managers
Develop Corporate
Values
PHASE 3
•Discuss terms of merger and acquisition
•Draft contractual agreements
•Begin facilitating cultural convergence
PHASE 4
•Strategize cystoscope sterilization product
introduction in key markets

21. Conclusion
Strengths
● Cantel Medical has proven to have earnings growth that is above average. This
strong growth coupled with expanding markets will ensure Cantel’s long term
success.
Goals
● Utilizing its core competency in M&A coupled with Cantel’s innovative R&D will
allow it to continue pioneering medical forefronts.

22. Questions?

31. Work Cited
http://www.bostonscientific.com/en-US/about-us/core-businesses.html
http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_CMN_2016.pdf
https://money.usnews.com/money/retirement/slideshows/10-rapidly-aging-countries?slide=4
http://www.worldatlas.com/articles/countries-with-the-largest-aging-population-in-the-world.html
http://www.nasdaq.com/symbol/cmd/stock-report
https://www.globaldata.com/urology-endoscopes-market-hit-1-4-billion-2023-says-globaldata/
http://www.crt.org/images/files/file/Scherr-Advancements-in-Urological-Oncology.pdf
http://www.todaysmedicaldevelopments.com/article/nephrology-urology-medical-device-market-1417/