Kinetic Concepts has agreed to be acquired by the private equity group Apax Partners LLP for $4.98 billion in cash. The deal is the largest leveraged buyout since Lehman Brothers filed for bankruptcy at the start of the recession, Bloomberg News reported. Assumed debt will add about $1.3 billion to the KCI price tag.
Stockholders of the company — which makes wound-care products such as tissue regeneration products and negative pressure wound vacuums — will get $68.50 per share. San Antonio-based Kinetic holds 81% of worldwide market for negative pressure wound therapy, followed by Smith & Nephew, according to news reports.
Wall Street analysts say that sales of the company’s primary wound-treatment segment have been steady since 2008. Its free cash flow yield of nearly 9%, in addition to Kinetic’s new portable wound-care device, have made it attractive to private equity. Kinetic, which also is commonly known as KCI, will enter a 40-day period in which it can solicit competitive bids. But analysts say the current deal is a good one for stakeholders and they doubt a higher bidder will emerge.
