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Victoria medical-device maker Starfish acquires Toronto firm

In a bid to attract more business from the medical-technology hubs of the eastern U.S., Starfish Medical has extended its rays across the country and acquired Toronto medical-device designer Kangaroo Group.
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Scott Phillips, president of Starfish Medical, at his company's Victoria headquarters.

In a bid to attract more business from the medical-technology hubs of the eastern U.S., Starfish Medical has extended its rays across the country and acquired Toronto medical-device designer Kangaroo Group.

Terms of the sale have not been released, but the result will be a single company with headquarters in Victoria under the Starfish name.

“There are lots of transformations when you’re in our kind of business. We feel we are reinventing ourselves every couple of years and this is just another one,” said Starfish founder Scott Phillips. “The innovation and change is relentless.”

The acquisition, apart from establishing Starfish as a national medical-device developer, will put the company on the radar of medical-technology companies that have clustered in Boston and Minneapolis.

“We weren’t getting very good access to that. We cover the west particularly well, but once in a while we’d lose a job because people thought it might be a hassle to visit us,” said Phillips.

He said Kangaroo has been well represented in eastern Canada, but hasn’t made much headway into the U.S. “That’s our opportunity — to use this location and make much more of an impact.”

Phillips said establishing Starfish across the country also reinforces the brand and sends the message the company can handle big jobs from larger companies.

The company Starfish has acquired has about 25 employees, adding to the 100 at Starfish.

“Kangaroo has a core strength in industrial design and Starfish has core strengths in physics, software, electronic design, optics, ultrasound and other core technologies. I’m excited to see what we can do together,” said Phillips.

For Lahav Gil, founder and chief executive of Kangaroo who will now be vice-president of innovation for Starfish, the merger seemed to be destined.

“It’s magical how that happened and how we’re at that point where it seems frictionless,” he said. “Existing Kangaroo clients will experience much more robust service and offerings. On the product development side, they will be able to tap into a plethora of additional expertise. In manufacturing they’ll find an expanded supply chain and regulatory personnel and expertise.”

Phillips said Kangaroo had the right culture and outlook.

“We looked at several companies, but the guys in Toronto were a good fit,” Phillips said, noting they shared the same drive to get to the bottom of things and to constantly be innovative.

“We felt most mergers fail due to culture and we wanted to find one that had a foundation we could work with from all the way across the country.”

That was key as none of Starfish’s senior managers wanted to leave the Island to oversee the Toronto operation.

Phillips said there will be a learning curve the company works through as teams in Victoria will be working with counterparts in Toronto.

“That’s something we have to figure out how to do effectively,” he said.

The sale comes after more than two years of intense growth at Starfish, which has expanded within its own Victoria offices and maintained a healthy hiring pace.

Phillips said Starfish has seen 50 per cent growth in each of the last two years.

“It’s kind of remarkable how the company has changed,” said Phillips. “There has been so much demand the last few years, we’re at a break-neck pace.

“We did want to take a breath and re-tool, and yet here we have just bought a company and hired 10 new people.”

Phillips said he wants to take a cautious approach to future expansion, and will focus on building business in the east before looking at expansion on the West Coast of the U.S.

The recent growth spurt appears to be down to the nature of the business.

The company is 17 years old and has enough satisfied clients to develop and enhance its reputation in the medical device field. “Work in this field is a matter of reputation and referral,” said Phillips noting most sizable projects can take five years or more to complete. “So it takes a while to build up a reputation.”

aduffy@timescolonist.com