The Little Company That Conquered Conglomerates
Anne Eiting Klamar was working as a family physician when her father told her he was planning to sell his medical equipment business, which had been founded by his grandfather. As a first step, Jim Eiting retired as chief executive of Midmark Corp. in 1995, and brought in an outside president.
"That didn't work out," said Klamar. "But I told Dad, 'Don't sell the company.'"
Instead she and her husband, also a physician, decided to move their family from Urbana, Ohio, to rural Versailles, where Midmark is headquartered. In 2000, Klamar took over as president and CEO.
In an industry dominated by international conglomerates such as Siemens and General Electric, Midmark -- with a market capitalization of well under $1 billion -- is a niche player, and a small one at that.
But through a combination of smart acquisitions and a global outlook, the privately held company has held its own and set an example of how a small regional company can play in the big leagues and win.
They also have helped their industry by promoting a socially and environmentally conscious corporate culture that includes donating medical and dental equipment to developing countries and offering onsite health evaluations and a wellness center to its employees, whom it calls "teammates."
"Thirty years ago, there were two companies that did it best in their space, Midmark and Welch Allyn," says Rob Saron, president of Bovie Medical Corp., a Clearwater, Fla.-based maker of electro-surgical generators and cauteries. "Today, Midmark still does it right, even though now they are a very large little company."
Midmark, founded in 1915 as a cement mixer company, had evolved from a manufacturer of mining and foundry equipment to a maker of healthcare equipment such as exam tables for the medical and veterinary markets.
But it was showing signs of a company past its prime. "We were caught up in our success," Klamar said, referring the company's then-high market share. "I thought that was dangerous."
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With little business experience, Klamar wasn't sure she was up to the task of reviving it. But she had some good ideas about what was wrong. She also knew how inefficient the company was at marketing to the medical profession, based on her own experience as a doctor. (From 2005 to 2007, she attended the Owner/President Management program at Harvard Business School.)
Klamar also believed the company needed to become global "because companies that weren't going global at that time weren't doing that well, and weren't going to be around a long time," she said.
In 1998, through a connection of her father's, Midmark purchased Arteme, a French holding company for makers of primary and acute-care medical products. Klamar used the company's first international acquisition as a template for further global expansion.
"We looked for acquisitions with a cultural fit," she said.
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During her tenure, Klamar has spearheaded the purchase of Janak Healthcare, a medical products manufacturer in Mumbai, India, and Newmed, an Italian tabletop sterilizer company.
Expansion into the digital diagnostics market has been another driver of growth for Midmark, though not an obvious one for a company that specializes in low-tech products such as procedure tables, medical carts, and cabinets.
But Klamar and her management team saw an opportunity to integrate devices such as scales and wireless communicators into their products. Midmark's 2000 acquisition of Brentwood Medical Products, a digital diagnostics purveyor, was one of the company's biggest risks but has paid dividends over time. "We want to be about integration and connectivity," Klamar said.
That's not to say that Midmark hasn't had its failures.
Two years ago, it bought a minority share in Cleveland Medical Devices, which developed an affordable portable sleep testing monitor that made diagnosis of sleep apnea much more affordable. But insurance companies had not yet decided whether to reimburse for the $200 product.
"Without reimbursement, the customers weren't interested," Klamar said.
While Midmark is nowhere near the top of the heap in its industry, it has endeavored to make its smaller size a virtue. "Our goal is go into niches that are big enough to move our needle but not big enough for GE and Siemens," Klamar said.
The company also seeks to create a culture of environmental and social responsibility that extends from its Ohio headquarters to its more remote outposts. Midmark works with its customers to help get their facilities LEED-certified, the highest category of green building. It also reequipped the Republic of Tanzania's only dental school.
"We want our teammates to feel good about working here," Klamar said. "Our humanitarian efforts actually help attract younger talent to Midmark."
Within the medical equipment industry, Midmark has earned goodwill by developing strong relationships with distributor partners and offering unusually memorable promotions.
"We did one where we sent distributors a shoe and said, 'We'll give you the other shoe for 10 leads,'" said Klamar.
Bovie's Saron participated in one such promotion. "It's a friendly industry, and they've always been willing to help," he said.
Meanwhile, Klamar and her team continue to contemplate expansion into Africa and possibly China. They're also figuring out how to absorb the new federal medical device tax, which adds 2.3 percent onto each purchase as of Jan. 1, 2013.
But Klamar is committed to growing the company once run by her great-grandfather by sticking to old-fashioned corporate values.
"We stay in touch with the market and talk with our distributors: What do you need and want? What do you customers want?"
Her goal for the next decade? "We want to be a $1 billion company," she said without hesitation. "And we're pretty much on schedule."