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all the thriving businesses that started in a garage live on the
Left Coast. Synergetics, a precision surgical tool manufacturer
is about to move into a new 34,000-square-foot facility on five
acres in O’Fallon, Mo.
What’s more, co-founder, president and CEO Gregg Scheller fully
expect the company to use built-in knockouts to expand the facility
to 60,000 square feet. Why not?
Last year Synergetics scored more than $10 million in sales. The
company has 95 employees, a dozen of whom are also among 70 shareholders.
“Through internal growth, we add 15-to-20 jobs a year,” Scheller
says. “Sales grew 32 percent last year and 25 percent the year before.
We are in an acquisition mode and we are looking all over the world.”
He and executive vice president and COO Kurt Gampp started Synergetics
in Scheller’s two-car garage in 1991.
“We make and market tools for dealing with diseases of the retina,”
Scheller says.
Your retinas are on the back wall of your peepers. And yes, to reach
it the ophthalmologic surgeon must do more than cross his heart
and hope to die.
He works through a shaft less than a millimeter—as small as a half-millimeter—in
diameter, with the world’s smallest scissors, forceps, tweezers,
knives and picks.
“The most common problems that our instruments address are complications
from diabetes,” Scheller points out.
If it seems like a narrow niche, that’s the idea. The broader the
market is, say cataract surgical instruments, the more competitive
it is. “When we started, we were the only U.S. company making these
instruments,” Scheller says. “Our competitors were based in Switzerland
and Holland.”
Scheller and Gampp’s paths might have crossed any number of times.
Both attended Parkway West, but five years apart. Both worked at
Storz, but so did 500 other people when Scheller left to start Advanced
Surgical Products Inc. in 1986.
At ASP Scheller, an engineer, discovered he needed a master surgical
instrument maker, Gampp. “We developed the first disposable tool
used to provide light to ophthalmologic surgeons,” Scheller says.
“I recognized the need for those endo-illuminators to be more than
just flashlights, so we began to put simple surgical tools on the
ends. We needed an instrument maker and a mutual friend said Kurt
was the man.”
Scheller, with a B.S. in mechanical engineering and experience as
a design engineer of cockpit instruments, is wowed by Gampp’s abilities.
“He is trained as an instrument maker, which is an incredible skill,
like an old time Swiss watchmaker. It’s similar in both principle
and tools. It requires the ability to visualize three-dimensionally
and to assemble a tiny working machine through a microscope.”
Scheller and Gampp worked together to build ASP into a $1.8 million
company in four years, selling it in 1990 to Infinitech.
These days, Scheller says, his work is focussed on sales, marketing,
engineering, and human resources. Gampp oversees purchasing, quality
control and manufacturing.
Scheller says, “We started Synergetics with proceeds from ASP, plus
we hooked up with local angels who invested in us for the first
four years, after which we became profitable and have been so since.”
The pair started by repairing ophthalmic instruments. They saw ways
to improve them, grew to have nine employees working three shifts
in the garage, and eventually moved into leased space in Chesterfield
Valley. A flood chased them to higher ground in St. Charles County
and the 18,400-square-foot facility they have occupied since 1997.
Not only have sales and payroll grown, Synergetics sells in 85 countries.
They have sales offices in London and Singapore. Some of their advanced
technology—precise machining tools—is one of a kind.
And, says Scheller, “We’re opening a second and new niche now, adapting
ophthalmic instruments to intracranial neurosurgery on aneurysms
and tumors. Just like we focus on the retina in ophthalmology, we
again focussed on the smaller, underserved market in neurosurgery.
The advantage is we give the neurosurgeon greater accessibility;
our tips are smaller and more flexible.”
Synergetics stays alert on the international market for acquisitions.
And promising innovation. “We’ve just licensed tech- nology from
Japan for the first ultrasonic bone cutter to remove bone in areas
surrounding the brain, allowing greater accessibility,” Scheller
says.
Synergetics has stuck to its knitting at home, too. Scheller: “We
reinvest about 10 percent of sales in R&D. Along the way, we have
accumulated 30 patents, many held jointly with ophthalmologists.”
Hardly surprising then that Synergetics is about to own their own
building. Or that Union Planters Bank and the St. Charles County
Industrial Development Authority were eager to help fund it with
a $2.6 million “mini-bond.”
Vice president Anne Silvestri, who has banked Synergetics since
1993, says “We were interested in various avenues to finance the
real estate for Kurt and Gregg. We supported their decision, and
I take my hat off to Mark Diliberto at the EDC for explaining the
benefits and cost-saving of the mini-IRB [industrial revenue bond]
program.”
She also made it clear why Union Planters was happy to buy the bond,
which repayment depends on Synergetics’ performance: “It’s a Cinderella
story. Their product is a preferred product with doctors, hospitals
and universities. Management is very focused, both Gregg and Kurt.
They’ve attracted good personnel and kept key sales talent as they’ve
added people.”
The bank is also one of the equity angels, an investment whose payoff
is looking better than a sharp stick in the eye.
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles. |
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