Creo Medical has announced the sale of a majority (51%) stake in its European consumable business to Chinese medical-device manufacturer Micro‐Tech for an enterprise value of €72m (2.3x EV/sales; 20x EV/EBIT). The deal is expected to complete in Q125 and will net the company c €30m (£25m) in dry powder. We see the sale of this mature business as a strategic move, providing liquidity as Creo accelerates its effort to launch its core suite of electrosurgical devices and partner its proprietary Kamaptive technology, both areas of higher growth potential. The European consumables business, which primarily includes Albyn Medical (acquired by Creo in July 2020), will likely be accounted as an investment in associates, requiring adjustments to our forecasts, following deal closure. We keep our estimates unchanged for now.
