“It was chemistry that made the difference.”
“We’d investigated a couple of different options – two that were strategic, and two that were financial. SV was the most attractive to us because their view was to support us and let us run as we were running – they’d let us execute our business strategy and run the business. They didn’t want to micromanage us, and they didn’t want to turn us into just another financial play, where we’d lose the innovation and lose what made the company successful.”
“They’re there for us when we need them. We’ve talked about funding issues, customer issues, how to minimize risk, potential customers. SV has a window on the world – they know what’s happening, they provide us not only with leads and contacts, but also with strategic knowledge of where the industry is going – a general marketplace perspective that we couldn’t otherwise get.”
– Randy Barko, Ximedica CEO
There is no shortage of outsourced medical device design or engineering firms. What made Ximedica stand out? Talent, scale and culture, says SV managing partner Paul LaViolette.
“Although there are many companies doing outsourced device R&D, most are small – groups of good engineers who’ve set up shop and built $1 – 2 million in revenue,” he says. “But Ximedica was different. It had a 20-year history. The company had reached significant revenue, achieved profitability and overcome myriad barriers that prevent most companies from achieving such scale.
“It is also just a cool and impressive group of people. Ximedica has a real design culture, along with engineering, with strong ties to the Rhode Island School of Design. It is the kind of company where talented people want to work.
“In the medical device space, we look for unique growth assets, and Ximedica gave us that.”
LaViolette knew of the firm from his days as Chief Operating Officer for Boston Scientific, a Ximedica client. But it was a mutual friend that later brought him together with the founders. Meetings – purely shop-talk at first – developed into an informal advisory relationship, and didn’t become more formal until 2012, when the founders were ready to write their next chapter of growth.
“The founders had already made a great move when they brought in Randy Barko as CEO to tighten up operations as a step toward growth or exit,” LaViolette says. “But there was no formal governance or growth strategy – the structure was a private partnership. The more we talked, the more we recognized a vital role here for SV. What Ximedica needed – establishing systems, creating diversification strategies, accelerating bold expansion moves – is what we do. And the opportunity was clear – Ximedica was the absolute best asset of scale in a large fragmented market growing at 20 percent, and they were at a key inflection point. This created a powerful and proprietary opportunity for SV.”
“We helped the team create a new corporate structure, established a board of directors and got to work on multiple expansion opportunities. We helped Ximedica expand the management team, diversify the client base and make acquisitions.
“We tried to bring our skills to the table while otherwise staying out of their way,” LaViolette says. “At times we provided guidance, other times simply reassurance – if you want to move in this direction, go for it. We helped the Ximedica team think bigger and we enabled them to shine. This management team has immense capacity. We aimed to be supportive while staying out of their way.”