Shareholders of Kinetic Concepts Inc. (NYSE:KCI) approved a $6.3 billion offer from Apax Partners and a pair of Canadian pension funds, with the deal slated to close early next month.
The $68.50-per-share leveraged buyout was broached in July, when the consortium offered a deal representing a 16 percent premium on KCI’s closing price July 5, the day before rumors spread on Wall Street that the San Antonio, Texas-based wound management company was in play.
Rumored suitors in the chase for KCI included private equity colossus Blackstone Group, said to be the front-runner until just before the Apax offer dropped.
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A late-stage suitor emerged almost literally at the 11th hour, when KCI rival ConvaTec slipped in an offer said to trump the Apax bid (but with shakier financing). Sure enough, the deal crumbled after a key financial plank was pulled.
The Apax/KCI deal is one of the largest leveraged buyouts since before the global recession of 2008.
KCI, founded in 1976, makes products for the wound care, bariatric and critical care markets. It pulled in just over $256 million in profit on $2.02 billion in sales in 2010.
Its new owners say they plan to “work actively in partnership with the management of KCI to help expand the company’s core businesses, invest in innovative new products and extend into new geographies where significant opportunities exist,” according to a press release.
“We are pleased to achieve this important milestone and look forward to closing the acquisition. KCI is an excellent business and we believe it has great potential for further growth,” Apax partner Buddy Gumina said in prepared remarks. “We look forward to working with management and our co-sponsors to drive the business forward.”