The 2011 marriage between Kinetic Concepts Inc., Apax Partners and a pair of Canadian pension funds wasn’t your typical merger.
Then again, there wasn’t much about the $6.1 billion go-private deal, the largest leveraged buyout since the fall of Lehman Brothers in 2008, that could be described as typical. From an unsolicited offer to the cloak-and-dagger due diligence process and a go-shop period that enabled KCI to try and solicit a better offer, the deal had all the drama of a Hollywood movie.
But for Catherine Burzik, the former CEO of KCI, the deal was literally an offer she couldn’t refuse. As our guest at the recent 2013 MassDevice Big 100 East, Burzik took us inside 1 of the most remarkable M&A deals in the recent history of the medical device industry.
"I was actually at our German sales meeting (in March 2011) when I got a call that said we had received an actual written offer for KCI," Burzik told us earlier this month. "Our board had not been doing a strategic assessment, our board did not want to be bought out, but Apax had studied the company for an entire year, had interviewed thousands of customers through market research firms and they had determined by the time they came to us that they were going to buy the company. They came with full financial backing from 3 banks. What they asked for was a limited time to do exclusive due diligence. So I literally had to fly home on the next plane. "
Burzik added that the deal, which included an exhaustive and top-secret due diligence process, as a "very trying time emotionally."
“Many of us hoped it would just go away. We all loved KCI being a public company. We were in the process of looking at another acquisition, similar to the LifeCell acquisition, and we thought we would just keep building the company."
In this wide-ranging interview, Burzik took us through the entire deal from the perspective of the corner office.
"It was a time of great uncertainty for the company, yet you’ve got this overwhelming need to perform financially because you’ve got your current board [and] the stock market looking at you, and you know if the company had a hiccup their offer would go down, they might walk away, and if they do the stock would tank," she said. "All these myriad pressures coming at you."