Rumors: Late bidder for Kinetic Concepts emerging?

August 16, 2011 by MassDevice staff

Bain Capital and Avista Capital Partners may be looking to snatch Kinetic Concepts from Apax Partners at the last minute, according to Bloomberg news service.

Kinetic Concepts

Shares of Kinetic Concepts Inc. (NYSE:KCI) are popping on Wall Street amid rumors that a last-minute bidder may be considering a bid for the company.

Two private equity titans, Bain Capital LLC and Avista Capital Partners LLC, are trying to raise money in order to best Apax Partners LLP's $6.3 billion bid to buy KCI, according to Bloomberg News Service.

The San Antonio, TX.-based wound maker agreed to a leveraged buyout by Apax and two Canadian pension funds in early July.

However, one of the deal's provisions, a so-called "go-shop" period, allows KCI to try and raise the ante for the deal by soliciting other bids. The go-shop window closes at 11:59 p.m. August 21, according to the filing with the federal SEC.

Bloomberg, citing unnamed sources, said that Bain and Avista may make an offer early next week and are in talks with investment banks Goldman Sachs Group Inc., Deutsche Bank AG, Citigroup Inc. and Jefferies Group Inc. to arrange the financing. However, the private equity firms may have trouble getting favorable financing as LBO's areas expensive as they've been all year, due to ongoing uncertainty about the global economy.

The rumors have been enough to send KCI shares up nearly 4 percent on The Street.

KCI agreed to be bought out and taken private in early July after an intense 18-week courtship with Apax that saw the final price change five times before the company agreed to the LBO. Despite several published reports that other private equity firms were involved in the KCI buyout, regulatory filings revealed that there was never a serious second bidder.

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