Huntleigh Technology PLC

310-312 Dallow Road
Luton,
United Kingdom
Telephone: +44 01582 413104
Fax: +44 01582 402589
Web site: http://www.huntleigh-technology.com

Public Company
Incorporated: 1975 as Huntleigh Group Ltd.
Employees: 2,200
Sales: £198.7 million ($368.6 million) (2004)
Stock Exchanges: London
Ticker Symbol: HTL
NAIC: 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing; 335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing; 423450 Medical, Dental and Hospital Equipment and Supplies Merchant Wholesalers

Huntleigh Technology PLC is a leading developer and producer of equipment for the healthcare industry. The company has built up market-leading positions in four core areas: Pressure Area Care (PAC), which includes mattresses, beds, and other equipment used for the prevention of pressure ulcers (i.e., bedsores); Patient Positioning and Transportation, including hospital beds, trolleys, and hoists, as well as couches, lockers, and related hospital and nursing home furniture and furnishings; Intermittent Pneumatic Compression (IPC), and especially equipment used for the prevention of deep vein thrombosis; and Diagnostics equipment, especially ultrasound-based equipment used for monitoring fetal development and blood flow and other vital statistics. Huntleigh distributes to more than 120 countries and operates manufacturing facilities in the United Kingdom, the United States, Australia, and South Africa. Iron lung inventor Rolf Schild founded the company, and the Schild family remains its largest single shareholder. Julian Schild is company chairman of the board. Huntleigh Technology is listed on the London Stock Exchange. In 2004, the company posted revenues of £199 million ($368 million).

ENGINEERING ORIGINS IN THE 1970S

Rolf Schild was born in Cologne, Germany, in 1924, and studied at that city's Jawne Gymnasium in the late 1930s. In 1939, Schild, whose father, a textile merchant, was Jewish, was sent to England as part of the Kindertransport rescue effort, arriving in Liverpool. Schild's parents remained behind and were murdered by the Nazis at the Chewnow concentration camp.

With the outbreak of the war, Schild found himself classified as an "alien enemy." As the war progressed, however, Schild, who had spent time in the internment center on the Isle of Man, was later transferred to Manchester. There, Schild was given training operating a capstan lathe. Soon after, Schild moved to London to join an aunt, who found him work at a film projector factory. Schild then began studying physics, engineering, and electronics at night school.

After the war, Schild joined the Allied forces for a time, serving as an interpreter for the U.S. Army, in the hope of discovering the fate of his parents. Returning to England, Schild went to work for New Electronics Products (NEP), under the direction of Zoltan Kellerman. At NEP, Schild developed a "phono cardiograph," a device for measuring and recording the sound of the heart. Schild then became part of the team developing a new "heart-lung" machine for use with polio patients in conjunction with Hammersmith Hospital. That device became more popularly known as the iron lung. Another major innovation was Schild's invention of a catheter-based "pressure transducer," which measured blood pressure within the heart.

While working at NEP, Schild was approached by an aircraft manufacturer, Hawker Siddeley, seeking a means of measuring the airflow pressure with aircraft engines. As Schild told the Sunday Times : "An engine is just a pump, similar to the heart, where flow, temperature and pressure are similar, so it was only a matter of adapting our existing system." Schild added: "This is how engineers work. You piece different ideas from various experiences and put them together. The key is to find the application and then create the solution."

Schild approached Kellerman with the idea of developing the project through NEP. Kellerman, however, did not see the potential in expanding into the aerospace industry. "Instinct has taught me that whenever you get a new idea for a product you need a feeling in your fingertips," Schild told the Sunday Times. "I felt this. Kellerman thought the potential in the airline market was nonsense, saying we sold only 300 transducers a year. I told him I would do it myself."

At first, Schild was allowed to pursue the project in his spare time, given space in a basement room at NEP. Schild recruited a friend, Peter Epstein, a valve engineer to the project, and set up a business initially called Mechanical Electronic Products (MEP). Soon after, however, Schild was asked to leave NEP. Joined by Epstein, the partners created a new company, SE Laboratories Ltd., with a starting capital of just £100.

Operating out of Schild's home, the company managed to win a number of contracts, from customers including De Havilland and English Electric. With no manufacturing capacity of its own, the company contracted for the manufacture of components, which Schild and Epstein assembled at Schild's home. The company's big break came in the mid-1950s, when the pair was contracted to provide transducers for the Blue Streak missile, the first attempt at building a ballistic missile. Schild and Epstein borrowed £5,000, backed by the mortgage on Epstein's father's house, and rented a nearby factory. By the 1960s, SE Laboratories employed 300 people and had grown into a major producer for the medical and aerospace industries. The company went public in 1963, in one of the London market's most successful initial public offerings of the time.

Thorn EMI acquired SE Laboratories in 1966. Schild at first remained as head of the company, working on the development of the first whole body scanner. EMI remained skeptical of the project until Schild sold 50 of the devices on a single trip to the United States. Nonetheless, Schild and EMI continued to disagree with the direction of Schild's body scanner work. In 1973, therefore, Schild left EMI, and acquired a stake in Hymatic Engineering, originally a producer of military equipment. In 1975, Schild merged Hymatic into Huntleigh Group. That company had been founded in 1969 as Flowtron Aire Ltd., but had been little more than a publicly listed shell company. Schild then performed a management buyout of Huntleigh, and its listing on the Unlisted Securities Market.

HEALTHCARE SECTOR SPECIALIST IN THE 1980S

Huntleigh started strongly, focusing on the healthcare sector. Among the company's earliest products was its development of a new generation of mattresses designed to prevent the formation of pressure ulcers, more popularly known as bedsores, in hospitalized patients. The company's initial design, called the Nimbus, boasted strong initial sales. By 1977, the success of the company's product led it to launch its first international sales effort, opening a sales office in the United States.

COMPANY PERSPECTIVES

Huntleigh Technology PLC is a major United Kingdom based group serving the global healthcare industry. Its strengths are its industry-renowned innovation, expertise and commitment to research and development, through which it has been able to develop its business internationally.

In 1979, however, the company was sidetracked when Schild, his wife, and his daughter were kidnapped while vacationing in Italy; the kidnappers had mistaken Schild for a member of the Rothschild family. Schild himself was released after several weeks; his wife and daughter were released several months later.

With that ordeal over, Schild now began building Huntleigh in earnest. In 1985, Schild reincorporated the company as Huntleigh Technology PLC and listed it on the London Stock Exchange. The company now focused its production entirely on the healthcare sector. By 1987, the company's revenues had topped £10 million, with profits of more than £100,000. Joining Schild in the business was son Julian Schild, who became finance director by the early 1990s, before taking over the company's direction at the dawn of the 21st century.

By the early 1990s, Huntleigh's sales had risen past £30 million, and the company's profits had soared to more than £5.5 million. Part of the group's growth came from the successful launch of the new Nimbus Dynamic Flotation System in 1988, which established the company as a leading player in the pressure ulcer prevention market. By the early 1990s, Huntleigh had captured the lead in the U.K. hospital bedding market. In the early 1990s, also, the company reorganized its operations, segmenting the company into its core product areas. These included a range of electronic diagnostic equipment, launched in 1992, and the company's line of compression devices, used for treating lymphatic and vascular problems, and also for the prevention of deep vein thrombosis. The company's operations in this latter category were particularly focused on the U.S. market. As part of its reorganization, the company created a new subsidiary, Huntleigh Healthcare, in 1990.

In support of its sales success, Huntleigh invested strongly in new manufacturing facilities, as well as expanded research and development capacity in the early 1990s. An important boost to the group's operations came with its acquisition, through Huntleigh Healthcare, of hospital bed manufacturer Nesbit Evans. The purchase complemented Huntleigh's own strength in hospital mattresses, and also gave the company an entry into Australia, then Nesbit Evans's most important foreign market. The newly merged operation was renamed HNE Healthcare.

BUILDING INTERNATIONAL SALES IN THE NEW CENTURY

Huntleigh, which relied heavily on the United Kingdom's National Health Care system for its revenues, became more and more interested in building up its international scope through the 1990s and into the 2000s. In 1993, the company established a subsidiary in France, HNE Médical S.A.S. The company also established subsidiaries in Germany, Switzerland, and Austria, and entered the Benelux market in 1996, opening subsidiaries in Holland and Belgium. Also that year, the company made a new acquisition, of Hoskins Healthcare, a U.K.-based maker of equipment for the healthcare industry.

By 1998, Huntleigh's sales had topped £100 million. The company continued in its international development, adding subsidiaries in Denmark, while also entering the Latin American market. In 1999, Huntleigh moved into Singapore, and also established a subsidiary in Sweden. The company also entered South Africa that year. By 2000, the company had expanded its sales network to Spain and India. The group's efforts to rebalance its sales profile paid off; by the end of the decade, some 60 percent of the group's sales came from outside of the United Kingdom.

KEY DATES

1973:

Rolf Schild, an engineer and inventor of the iron lung, acquires control of Hymatic Engineering, a producer of military equipment.

1975:

Schild merges Hymatic into Huntleigh Group, a shell company with a listing on the Unlisted Securities Market.

1977:

Huntleigh establishes a U.S. sales subsidiary.

1985:

The company is reincorporated as healthcare specialist Huntleigh Technology and is listed on the London Stock Exchange.

1988:

The Nimbus Dynamic Floating System, designed to prevent pressure ulcers, is launched.

1990:

The company reorganizes its operations and creates a new Huntleigh Healthcare subsidiary.

1992:

A sales subsidiary in Australia is added.

1993:

The company acquires hospital bed manufacturer Nesbit Evans; a subsidiary is launched in France.

1996:

U.K.-based Hoskins Healthcare is acquired.

2001:

The company acquires Joyce Healthcare in Australia, adding its first international manufacturing operations.

2002:

The company acquires Hejsani Duncan in South Africa.

2005:

The cardiovascular and obstetrics diagnostic equipment division is acquired from Viasys Healthcare.

In the early 2000s, Huntleigh moved to back up its growing global presence with an expansion of its manufacturing network. The company added its first foreign manufacturing plant in 2001, through the acquisition of Australia's Joyce Healthcare. The following year, the company added a production presence in South Africa, buying up that country's Hejsani Duncan.

Rolf Schild remained active in the company's operations until his death at age 78 in 2003. The company's new management, led by Julian Schild, now embarked on a new expansion strategy designed to continue to increase the percentage of the group's international sales, as well as increase its manufacturing base. The company especially targeted growth in the United States, where its market share stood at just 1 percent. As part of that effort, the company boosted its research and development. By 2004, the company's R&D effort led to the development of a new-generation hospital bed, including a model designed specifically for the U.S. market, as well as a budget model to boost the group's presence in developing markets.

Huntleigh also began targeting acquisitions into the mid-2000s. By July 2005, the company had located its first target, paying £4 million ($7.3 million) to acquire Viasys Healthcare's cardiovascular and obstetric analysis and monitoring equipment division. The purchase added the Sonicaid and Medilog brands to Huntleigh's own diagnostic division line. Meanwhile, the company boosted its U.S. presence through a three-year supply agreement with Novation for Huntleigh's deep-vein thrombosis prevention systems. Huntleigh expected to remain a major player in its core healthcare equipment markets into the new century.

PRINCIPAL SUBSIDIARIES

HNE Huntleigh Healthcare Medizinprodukte GmbH (Austria); Huntleigh Healthcare N.V. S.A. (Belgium); Huntleigh Healthcare A/S (Denmark); HNE Médical S.A.S. (France); HNE Huntleigh Nesbit Evans Healthcare GmbH (Germany); Huntleigh Healthcare B.V. (Holland); Huntleigh Healthcare SL (Spain); Huntleigh Healthcare AB (Sweden); HNE Médical S.A. (Switzerland); Huntleigh Healthcare Ltd.—Pressure Area Care (U.K.); Huntleigh Healthcare Ltd.—Patient Positioning and Transportation (U.K.); Huntleigh Healthcare Ltd.—Intermittent Pneumatic Compression (U.K.); Huntleigh Healthcare Ltd.—Diagnostics (U.K.); Huntleigh Healthcare Ltd.—Akron (U.K.); Huntleigh Renray Ltd. (U.K.); Huntleigh Healthcare L.L.C. (U.S.A.); Huntleigh Healthcare India Pvt. Ltd.; Huntleigh Healthcare Pty. Ltd. (Australia); Huntleigh Healthcare Ltd. (New Zealand).

PRINCIPAL COMPETITORS

Medtronic Inc.; Baxter HealthcareCorporation; Medtronic AVE Inc.; Gambro AB; B Braun Melsungen AG; Fresenius Medical Care; Amersham Health A.S.

FURTHER READING

Firn, David, "Huntleigh in Move to Reduce NHS Reliance," Financial Times, June 11, 2004, p. 22.

Groom, Brian, "Huntleigh Probes Medical Market with New Products," Financial Times, September 20, 1999, p. 26.

"Huntleigh Acquires Analysis and Monitoring Business," Pharma Marketletter, July 4, 2005.

"Huntleigh Goes Steady," Birmingham Post, March 17, 2005, p. 29.

"Huntleigh Technology," Investors Chronicle, September 23, 2005.

Levi, Jim, "Huntleigh's Painless Route to Stardom," Management Today, August 1993, p. 48.

Pain, Steve, "Medical Systems Group Ups Pace," Birmingham Post, September 16, 2004, p. 21.

Richmond, Caroline, "Obituary: Rolf Schild: Businessman and Kidnap Victim," Independent, May 3, 2003, p. 26.

"Rolf Schild; Obituary," The Times, April 21, 2003, p. 22.

Smith, Caroline, "US Deal Points to Overseas Expansion," Financial Times, February 7, 2004.

Steiner, Rupert, "Iron Lung Inventor Got Off to Flying Start," Sunday Times, May 30, 1999, p. 14.