Creo Medical Agrees Sale of Manufacturing Operation in Management Buyout
Chepstow-based medical devices company Creo Medical has announced an agreement to sell its manufacturing operation as part of an ongoing efficiency drive. The deal, whose value remains undisclosed, is scheduled to be finalised next month through a management buyout arrangement.
Strategic Shift to Third-Party Manufacturing
Creo Medical, which specialises in minimally invasive surgical endoscopy devices for pre-cancer and cancer patients, confirmed that 25 staff members will transfer to a new entity named NewCo. This new company will become a third-party manufacturer for Creo's medical devices.
The manufacturing disposal aligns with Creo's strategic pivot toward becoming what it describes as a "lean, new product introduction company" that focuses on designing, building, and testing medical devices while outsourcing production to third-party partners. After evaluating various options, the company determined that a management buyout represented the optimal outsourcing solution.
Leadership Perspectives on the Transition
Peter Tomlinson, currently chief operating officer at Creo and designated chief executive of NewCo, stated: "This strategic decision marks an exciting new chapter for the Creo Medical operations team. Having developed the manufacturing capability within Creo, we see a clear opportunity to establish a focused, world-class medical device manufacturing and engineering business."
Tomlinson emphasised that the new entity will maintain the agility to invest, scale, and support various medical device innovators while continuing as a trusted partner to Creo. "Our ambition is to build a highly capable and globally competitive manufacturing platform for advanced medical technologies," he added.
Creo's chief executive, Craig Guliford, explained: "We have a commitment to improve the operational efficiency of the business and focus on our core strengths as a world-class medical device design, clinical application, and sales execution business." He noted that outsourcing product manufacturing represents a key component of this strategy, following the earlier outsourcing of their next-generation bipolar range in their near-term product launch program.
Financial Performance and Future Outlook
In a January trading statement, Creo Medical reported achieving 50% revenue growth in 2025, reaching £6 million, with a particularly strong second half performance. Underlying operating losses decreased by more than 40% to £13.3 million, while cash and cash equivalents stood at £12.4 million, up from £8.7 million at the end of 2024. The company plans to publish its full accounts for the year this summer.
Broker Shore Capital noted in an analysis that Creo appears on track to reach an EBITDA breakeven position by 2028. The firm stated: "Creo Medical is at a commercial inflection point. In FY25, sales of its surgical endoscopy tools grew substantially (up 50%) despite a tightening cost base (down 20%), establishing that the model is starting to scale as clinical adoption compounds."
Shore Capital further highlighted that with US reimbursement secured for Speedboat and a new suite of products expected to launch within the next 12 months, growth is anticipated to accelerate. The framework now exists for Creo to progress toward self-sufficiency and achieve EBITDA breakeven in FY28.
Additional progress with Creo's MicroBlate lung cancer programme, developed in collaboration with robotics leader Intuitive Surgical, is also expected within this timeframe and could potentially unlock significant unrecognised value.
