Supplying Medical Parts Directly to Hospitals, with Thadd Mellott-EP 212

March 22, 2024 - 1:10pm -- Selcuk Gulboy

My guest on today’s show, Thadd Mellott, called us at Graff-Pinkert because he needed a Star SB20 CNC Swiss machine. His company, Circle M Spring, in Warsaw, Indiana, produces medical parts, including implantable orthopedic components. Circle M Spring is currently merging with a medical component design company that specializes in sports medicine. Thadd is incredibly excited about the merger because he now will have the rare ability to supply medical components directly to hospitals—a privilege that most machining companies can only dream about.

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Interview Highlights

Currently, Circle M Spring operates as a Tier 1 supplier to major orthopedic manufacturers like Zimmer Biomet, DePuy Synthes, Medtronic and others, producing components like reamers, slap hammers, implants, screws and instrumentation. The company also makes firearm components for AR-15 rifles, which Thadd says is unique for machining companies in Warsaw, Indiana.

Circle M was founded in 1998 by Thadd Mellott and his father after his father took early retirement from a 37-year career at another spring company. Thadd was a junior in college doing pre-med but decided to quit school and go into business making springs with his father when he was given the opportunity.

I asked him if it was a difficult decision to pivot from a career path of becoming a doctor to starting a machining company. He said that growing up around Warsaw, Indiana, he had already worked a lot in machine shops. The idea of going into manufacturing seemed like a great opportunity, so he didn’t think twice.

Over the years, Circle M Spring diversified, producing medical parts, including implantables as well as firearms after landing a government contract for gun components. The orthopedic work came about due to Circle M’s location in Warsaw, which many people consider the “medical device capital of the world.”

Now, Circle M is merging with two other companies to create a new parent entity that Mellott will be president of with 51% ownership.

One company is Rebellion Medical Solutions – Founded by Brandon Miller, a former high-level executive at Biomet who started a medical device design firm after the Biomet/Zimmer merger.

The other company in the merger is a medical device OEM owned by a former NFL player. The company is minority owned, which gives it the privilege of selling products directly to hospitals.

The merger allows for a vertically integrated operation – Rebellion handles product design and securing FDA 510k clearances, Circle M is the manufacturing arm, and the former NFL player’s company can distribute devices straight to hospitals without going through larger orthopedic companies as middlemen.

The merger structure provides several key advantages according to Mellott:

It can rapidly fulfill requests from surgeons for customized instruments and implants without the delays and bureaucracy of bigger companies. It also can offer competitive pricing without markups that major orthopedic companies apply.

The newly formed company will have the ability to expand into other medical fields beyond orthopedics by leveraging its integrated capabilities. Special status as a minority-owned business will allow access to lucrative government and diversity supplier contracts that major players cannot pursue.

While Circle M Spring will still also supply larger orthopedic firms, the long-term goal is to grow the hospital sales channel for its own product line and become a more disruptive player in the medical device space.

Another benefit of the merger is that it allows Thadd to realize his passion for positively impacting healthcare that dates back to his pre-med days when he had ambitions of becoming a neurosurgeon after his brother’s death from an aneurysm.

At the end of the interview, he told me he wanted to be a doctor because it would be great just to help people. He has a daughter currently going to school to work in the medical field, and he sees that trait in her as well.

Question: Who is your company’s dream customer?

This article was originally posted on https://todaysmachiningworld.com/supplying-medical-parts-straight-to-hos...

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