Dental Implant Firm to Buy O.C. Competitor

By BARBARA MARSH

June 30, 1998 12 AM PT

TIMES STAFF WRITER

One of the world’s largest manufacturers of dental implants said Monday it plans to buy its Yorba Linda-based competitor, Steri-Oss Inc., in a stock-and-cash deal valued at $97 million plus debt.

Nobel Biocare AB of Sweden said it will move its U.S. headquarters to Yorba Linda and retain Steri-Oss’ management team.

“Steri-Oss is a highly successful company and we want to keep the momentum that Steri-Oss has,” said Jack Forsgren, Nobel Biocare’s chief executive. “So we think we should integrate our business into theirs, instead of theirs into ours.”

The deal, subject to approval by shareholders and regulators, is expected to close in the fall.

The two companies are teaming up to build strength in a marketplace dotted with small competitors, officials said. Among other things, they aim to collaborate on a marketing campaign to promote dental implants to consumers.

Steri-Oss President Martin Dymek, who would become president of the Swedish company’s North American operations, noted that the once-hot market for implants among patients with severe dental problems has cooled because most who could afford them now have them.

Now, the companies aim to broaden the market, Dymek said. One possible target: Individuals who lose teeth in sports injuries, accidents and other traumas.

A single implant--consisting of a prosthesis that resembles a sawed-down tooth and a tiny screw that attaches it to the jawbone--costs from $1,000 to $1,500. That excludes the costs of a crown that covers it and professional fees.

Forsgren, who will be Dymek’s boss, said the Swedish firm is the industry’s largest company but still can’t afford direct-to-consumer advertising on its own.

Last year, Nobel Biocare, which is traded on the Swedish stock exchange, posted profits of about $10 million on revenue of $140 million. The company employs 800 people--300 in Sweden and the rest in worldwide sales.

He said Steri-Oss’ work force of about 260 will remain, and he intends to hire 40 to 50 more employees by the end of the year to accommodate the merger. He expects 10 to 15 employees from Nobel Biocare’s operations in Illinois will transfer to Yorba Linda.

One Nobel Biocare official said some positions in administration, logistics and general operations could be eliminated, but he declined to say how many. The Swedish company employs 100 in North America, including 60 in Illinois.

Steri-Oss, founded 13 years ago, was acquired in 1993 by vision care giant Bausch & Lomb when the Rochester, N.Y., company was trying to diversify. Three years later, Bausch & Lomb withdrew from the dental market and sold Steri-Oss to the Yorba Linda company’s top executives and a private investment fund.

Last year, Steri-Oss hoped to reduce debt it incurred in the buyout by raising $65 million in an initial public offering. But it scratched that plan when the stock market tumbled last fall.

Nobel Biocare traces its beginnings to a research discovery by Per-Ingvar Branemark, a Swedish anatomy professor, company officials say. Branemark discovered that titanium could be incorporated in living bone--a finding that led to use of titanium in bone and dental implants. Branemark linked up with an industrial partner, Nobel Industrier AB, a company founded by Alfred Nobel. When its partner merged with another firm in 1993, Nobel Biocare was spun off as an independent company.

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Implant Players

In a move that cements its position as one of the world’s largest implant makers, Swedish-based Nobel Biocare AB, has agreed to buy Steri-Oss Inc. in Yorba Linda. The two companies at a glance:

NOBEL BIOCARE AB

Headquarters: Gteborg, Sweden

Employees: 800

Chief executive: Jack Forsgren

Products: Dental implants and related items

1997 sales: $140 million

1997 profit: $10 million

STERI-OSS INC.

Headquarters: Yorba Linda

Employees: 260

President: Martin Dymek

Products: Dental implants