The CPPIB is teaming with the Public Sector Pension Investment Board (PSP Investments), a Canadian crown corporation, and London-headquartered Apax Partners to buy Kinetic Concepts Inc. (KCI), a producer of wound care products, for US$6.3 billion, including debt.
Kinetic of San Antonio, Calif., said this morning that the transaction is being made for $68.50 per share, which values the company at $4.98 billion.
“KCI is the market leader in its businesses with strong growth potential particularly outside of the core U.S. market,” said Andre Bourbonnais, CPPIB’s senior vice-president of private investments, in a release. “KCI’s business is well-positioned for growth based on global trends such as demographics, including longevity and an aging population.”
Derek Murphy, first vice-president, private equity, with PSP Investments, added, “This is an attractive opportunity to acquire a global market leader offering stable core revenues and significant growth opportunities through new products and geographic expansion. Apax brings significant expertise in the healthcare sector, while CPPIB is a like-minded investor with a long-term investment horizon.”
Kinetic said its board has approved the sale and recommended stockholders tender their shares to the agreement. The company also has a 40-day “go-shop” period that will allow it to seek competing offers.
Before the agreement is finalized, it also faces typical regulatory and other customary approvals, though a closing date is targeted for the second half of 2011.