Petaluma's Labcon wins North Bay Maker Award
Seeing a need for a local sterilization company to support the growing biotech, medical device and pharmaceutical industry in the North Bay, Labcon President Jim Happ approached Synergy Health in 2013 and encouraged this global provider of outsourced sterilization services to form a partnership that would result in a new Sonoma County plant to serve as a hub for a growing life sciences industry.
“The technology deployed for sterilization in Petaluma uses an electron beam, instead of water or steam,” according to Happ. “Traditional methods either degrade materials, or leave residue behind, and are not as efficient as high speed E-beam technology.”
E-beam irradiation has been in use since the 1950s. It can deliver the irradiating dose in just a few seconds resulting in shorter processing times and improved supply chain efficiencies. No chemical residuals remain on processed products, making it a clean, safe and environmentally friendly technology.
“Sterilization is a necessary process for the invention, engineering and commercialization of medical devices, and for changing and enhancing desired material properties,” Happ said. “Having this essential technology close at hand is an incentive for more medical device startups and manufacturers to locate, compete and succeed in our region.”
Labcon, a wholly owned subsidiary of Helena Laboratories of Beaumont, Texas, became the largest consumer of industrial sterilization in Northern California in 2003. The firm makes more than a billion products a year including culture and centrifuge tubes; pipet, aerosol filter and robotic tips, along with microbiology disposables, organization tools and a wide range of OEM/specialty items. Labcon has revenues of $34 million annually.
Synergy Health, based in Swindon, England, has worldwide operations and revenue of about $650 million a year. It has four U.S. plants, including one in San Diego.
To sweeten the offer to Synergy, Labcon purchased ten acres of land at 3200 Lakeville Highway in Petaluma – half a mile from its own location -- and financed the remodeling of existing buildings with 71,000 square feet of space. It also will break ground for the construction of a 40,000 square foot warehouse later this year.
Labcon and Synergy essentially partnered in the $12 million project with Synergy building the infrastructure and installing the sterilization equipment.
“We’re covering the base load of this facility so it can become established and ramp up over time while mitigating high initial costs typically associated with a new plant,” Happ explained.
Synergy opened its new plant initially using 31,000 square feet of total space in October 2015, with Labcon and Synergy signing a 20-year contract and lease agreements. The starting workforce included 10 employees.
As Synergy Health’s U.S. management team headquartered in Ohio was consummating the Labcon agreement, Synergy officials at its global British home office were negotiating to sell its operations to Mentor, Ohio-based Steris Corporation, a worldwide leader in infection prevention, contamination control, surgical and critical care technologies as well as sterilization products.
On Nov. 2, Steris Corporation completed its acquisition of Synergy Health for $1.9 billion in stock and cash. The new name for the combined entities became Steris AST (Applied Sterilization Technology) listed in the New York Stock Exchange under the symbol STE.
Mike Clark, area vice president, operations and technology, for Steris AST said: “Our acquisition of Synergy Health is 100% complete. It’s an exciting time for customers and our organization. Petaluma is our fifth facility in California.