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Ask UsNobel Buys Alpha Bio: What is the Motivation?
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Last month, Warburg Pincus snapped up Lifecore Biomedical for $239 million, and this month Nobel Biocare announced the acquisition of Alpha Bio for $95 million. The question is: Who’s next in the new Implant Mergers & Acquisitions saga? More importantly, what is driving this acquisition spree?
Private Equity firm Warburg Pincus, seemingly bought Lifecore to merge it into Keystone Dental, another Warburg creation, thereby providing Keystone with a much needed dental implant product line, a large revenue stream, and an existing customer base.
But what was the motivation behind Nobel’s purchase of Alpha Bio, as the company apparently was not generating enough revenue to justify a $95 million valuation.
According to Haaretz: “This isn’t a tech stock with army geniuses backed by angels. Alpha Bio Implant was a one-man show: Dr. Ophir Fromovich, CEO, owner and dentist to the stars, not that he’ll say who his clients are…Fromovich founded Alpha Bio Implant in 1988…The breakthrough came only in 2003, after another dentist, Nitzan Bichacho, contacted him about making advanced implants. The development team added dentists Ben Karmon and Yuval Jacoby, and together the four created a new type of implant…”
Given the above description of a seeming start-up operation, was the purchase of Alpha Bio mainly a defensive move on the part of Nobel, in an attempt to lock up some new type of technology or fend off a patent lawsuit on related Nobel technology?
What are your thoughts? Will these acquisitions lead to improved implant technology that helps both practitioners and patients?
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27 Responses to “ Nobel Buys Alpha Bio: What is the Motivation? ”
I would venture the fact that their new implant is a copy of the Alpha Bio implant might have something to do with it.
Alpha Bio developed the current NobelActive implant. Nobel Biocare apparently did not, or maybe forgot, to stipulate that Alpha Bio cease selling the Alpha Bio version of the NobelActive implant outside the US. Alpha Bio was selling the implant for somewhere around 1/3 the price of the NobelActive implant. There was nothing Nobel could do since Alpha Bio was not doing anything wrong by selling their version of the NobelActive. How does Nobel justify the 2.5x price premium for the Alpha Bio version? That is the $95 million question. In my opinion this was the motivation behind the purchase of Alpha Bio. Eliminate a low priced competitor to NobelActive. Nobel has some very lofty ambitions for NobelActive. Thus far though they have trained about 500 doctors in the US to place this “implant of the future.” This was disclosed in the year end results conference call on 2/11/08. There are about 95,000 dentists in the US. It is highly recommended by Nobel that doctors placing the NobelActive attend a training course. At the rate they are training it will be quite a while before this implant has any effect on the market or their bottom line.
A side note. The owners of Alpha Bio unsuccessfully shopped their company three years ago in the US with an asking price of about $5-7 Million. No takers. Now, 3 years later, Nobel pays 14 times that for the company. This is a great deal…for Alpha Bio.
Do you mean that Alpha Bio will cease to exist ? I have been using their implants for 2 years now and have been very happy with the results (and their competitive pricing… )
Thats the point,I think Nobel is moving into low budget implant market.With Alpha Bio present in over 40 countries,it is a good vehicle to increase market shares in this segment.
I was told ( as this buyout created a bit of a buzz here in Israel in the dentistry community) by Dr. Chaim Schloss,the head of the School of Dentistry in Tel Aviv, that the company WAS NOT purchased for their product but rather for their distribution channel. Just what I was told and don’t know if it is factual or just a damaged ego.
Dr. Leo - you hit the nail on the head, it seems.
Do you actually believe that Nobel needs additional distribution channels? They are already everywhere. Alpha Bio was purchased because of the product and the NobelActive Implant. RobMee has the correct interpretation above.
How could Nobel not charge more for the implant? That is the question. Yes, it is an Alph Bio implant with Nobel’s TiUnite surface. We all must remember that it is necessary to pay more to have the support the company offers. If you need help you can contact Nobel’s technical support. If your restorative doctor has questions or needs help restoring an implant who do they call? The Nobel sales rep. If you have a new surgical assistant, do you always have the time to train them on the system you use? The fact remains- You pay for that support. We have called the Nobel sales rep on short notice many times if we didn’t have the right part and they where there for us. Nobel will train the restorative docs for me and also help me market my practice. I have increased my practice by having the sales rep host restorative courses and educate my staff on how to educate my patients properly. I will gladly pay the extra expense to have the support and backing I get from Nobel. My patients are also comforted in knowing Nobel is there to be supportive as well. There are other good implant companies in the market but so far, in my area, I can’t beat the SUPPORT from Nobel!
Again, we will see Nobel users buying cheap implants for high prices….
How they will handle that for night to day alpha Bio implants will be sold as NobelBiocare Implants????
But again….Nobel Customers are easy to convince…..
Rightly said Dr Albert Hall!
Does anyone know for certain what Nobel intend to do with Alpha-Bio? Will I still be able to buy Alpha-Bio implants (which I have found to be absolutely excellent) from Alpha-Bio or will Ihave to start dealing with Nobel Reps? Thanks.
There will be changes,difficult to predict how radical.I belive SFB will sease to exist,so far Alpha-Bio stopped selling their surgical drills.
I would think that the reason for the aqcuisition is the implant design, which has a patent that AlphaBio owns. A very good technical support, how excellent it may seem, cannot be patented( I think). Any dental implant company can improve it’s technical support without having to spend $95 million. Nevertheless, only time will tell how many dentists will be willing to spend extra dollars per implant, for a good technical support. Queston is, where do AlphaBio users get their implants now? This needs concrete answers
Buying a company for attending “1st Class users ” and “economy class users ” with the same product is a wrong sales strategy because doctors will buy from other markets and the US and europe market will loose position toward competitors.
Nobel share is now 235 swiss francs and they appointed a former friend from Mr,Scala to re-direct the whole financial situation.
What happen when you call friends to help you?
New companies are going to be more competitive because Nobel can not maintain the burocratic positions and the ridiculous sales strategies.
Dr.Leo prepare a speech to your wife explaining why you are bringing less money home!
For Nobel customers are more inportant to talk each other about their skills, rather that their own families….they might be wealth enough I do not know that….
Many doctors beleive by buying Nobel Biocare Implants they are shortening the lack of knowledgment and wisdom in this profession.
Worst is that patients do not know the doctors……..
Sorry,I didn’t get it.Why should I bring less money home?
Which patent does Alpha Bio own? An internal hex with a morese taper connection above has been around forever with Astra. The shape of the Alpha Bio is similar to Pitt Easy as well as the One piece O company implant.
I for one will stop using Alpha-Bio if Nobel nobble it by putting up their prices and subjecting users to their silly sales reps.
There are plenty more low cost / allegedly high quality implant companies out there who do not spend a fortune every year on reps and marketing.
Niznick’s company springs to mind, however I’ve heard that what he sells is of dubious quality (or is that what he said about Alpha-Bio?!)
Maybe when you purchase those cheap implants you’ll put them in your Mother, at the same time pass on the savings to your patients, but you’ll leave the office and drive home in your BMW! I thought we were in this business to provide our patients with the best products and care. Our patients put their trust in our hands and it is up to us to deliver the best care possible.
Might be,but i am not in this business to make fat profit for Nobel shareholders.About two years ago I had a chat with a CEO of an implant company and of the record he admitted that basically all implants do integrate,the rest is marketing.So much for this.
All of the “big-market” implants integrate at a highly successful rate, with the possible exception of 3i. That point shouldn’t have been in question when you had your alleged discussion with a CEO. Nobel Biocare offers a predictable result and is far and away the easiest system to work with. There’s no question that you pay for marketing, but where isn’t that the case?
Typical Nobel marketing”far and away the easiest system to work with”.
Nobel Biocare is a freely purchased through your stock broker, 10 years ago you could purchase Nobel Stock for 14SF and 4000 shares or 56000SF is worth today 1,000,000SF. Now, if you place 1000 implants a year like typical Nobel Users, whats the difference between 96% and 99% success. 30 additional implant failures, which in turn eats at your profits from the 960 successes or what I hear 4×30, so 120 successful implants pay for your failures and by the way implants don’t fail. The biological site fails, to integrate with the implant, it just seems to happen more often with other companies who don’t have an answer to TiUnite. Why would I want to drive a stick shift car, if I can drive a BMW that practicly drives itself. If i’m getting heart surgery, I hope the surgeon is using the easiest system to work with, but I guess some of us want to live in the dark ages of dentistry.
Donald,
It’s you who lives in the dark ages. It’s not Alpha-Bio who have had problems with their implants and have had to withdraw them from the market!!
I guess that if you can only afford to drive a BMW (more common than Fords in the UK!) you are doing rather less than 1000 implants per year and if you need a shift stick to help you drive this would explain why you need the most simple of simple implant systems and not necessarily the best.
You stick to your ‘Implants for Dummies’; the rest of us will continue to offer our patients rather more for a smaller fee.
It’s clear you didn’t read the label, and your response is off base. Considering your lack of knowledge, I’ll pass on providing a real response.
Let me put some input here , I am an Alpha Bio user in Mexico , as far as I know the purchase is do to the patent , and also for Dr. Nitzan Bichacho’s efort to try to do some better quallity implants , the worst thing is that all of us Alpha Bio users will in the future will have to use Nobel or other company’s implants ( by the way , someone asks what they will use , try MIS Implants , A-B implants or Hy-Tech implants that are almost 100% compatible or try to serch for some components by Attachements - International ), also I do not thing this is a matter of marketing or quallity ,this is a matter of bussines ( in my humble opinion ) but we will see , if the only design will be from Nobel I will use it because it works fine , at least in my practice.
it’s the NobelActive that looks very much like AlphaBio’s SFB. the thread design and the bevel. that’s the design we’re talking about
Yes Dean that is right , a combo of the SPI and SFB, but the conection is diferent , as far as I see in the NobelActive , and AlpheBio’s catalogs , at least in Mexico we do not have yet the NobelActive , and you have to take a course to use the system ( NobelActive ), I will appreciate some info
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