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3M Co., the maker of Sticky Notes, Scotch and Ace bandages, has agreed to buy the San Antonio medical technology company, Acelity, as part of a transaction valued at around 6 , $ 7 billion.
The deal, announced Thursday, comes two weeks after Acelity, formerly known as Kinetic Concepts Inc., announced plans to publicly announce its third announcement in the company's history. The company and its KCI affiliates are known for their negative pressure wound therapy, which is used in healing and surgical management of wounds.
The purchase, which involves $ 2.4 billion in debt, is expected to be finalized in the second half of this year.
On ExpressNews.com: San Antonio Wound Care Company Prepares for IPO
"Today, KCI is entering a new era in its long history as a pioneer of healthcare," said Acelity Chairman Andrew R. Eckert in a statement. "The combination of KCI and 3M will accelerate the reach of a leading company in innovation, customer experience and clinical and economic evidence."
Acelity did not explain why she had chosen to abandon her IPO and accept the contract with 3M. Acelity spokeswoman Maggie Fairchild said the company would have no comments aside from her statement.
In a research note Thursday, William Blair's analysts said that "Acelity was not a robbery, but a solid (long-term) strategic agreement" for 3M.
"As Acelity's sales mix is heavily geared to the Americas, there are several opportunities to drive sales through 3M's global footprint," analysts said.
3M, a Minnesota-based company, expects Acelity to strengthen its Medical Solutions business, which provides medical tape, bandages, wound closure products and orthopedic molding equipment.
"The addition of Acelity will further expand our offering in Advanced Wound Care, which represents a growing market of $ 8 billion, with average single digit growth," said 3M President Mike Roman at a conference call with analysts.
"The growth of this market will continue to be driven by a number of macro trends," he added. "This includes increasing rates of chronic diseases, such as obesity and diabetes, which creates the need to effectively treat complex and persistent wounds."
Acelity belongs to a consortium of funds advised by London-based private equity firm Apax Partners, the Investment Board of the Canada Pension Plan and the Pension Investment Board. public sector. The group led by Apax acquired the company through a debt buyback of more than $ 6 billion in 2011. The company's name was later changed to Acelity of Kinetic Concepts.
The $ 2.9 billion sale of its regenerative medicine business, LifeCell, to pharmaceutical giant Allergan in 2017, highlighted the ownership of the group led by Apax. In 2013 Acelity acquired the UK-based Systagenix wound treatment development company for $ 486 million.
A file filed with the Securities and Exchange Commission two weeks ago revealed that the newly created KCI Holdings Inc. would be made public and serve as a holding company to Acelity. The deposit did not provide any details on the size of the offer. The group led by Apax, however, should continue to hold the majority of the voting shares.
Acelity lost about 138 million USD on a business turnover of 1.47 billion USD last year. Red ink contributed $ 176 million in interest expense on its debt.
The company was founded in 1976 by Dr. James Leininger as a manufacturer of medical beds.
Acelity had more than 1,000 local employees in February, when it announced the removal of approximately 200 jobs in San Antonio and 260 in total. Its workforce was about 4,700 people at the end of last year.
On ExpressNews.com: San Antonio's Acelity cuts 260 jobs
Bloomberg announced Thursday morning that 3M was turning to acquisitions as it struggled in several markets. The shares of 3M plunged 13% last week after revealing a weakness in their sectors. He announced that he was cutting 2,000 jobs.
Analysts at Bloomberg Intelligence described Acelity as a "good choice" for 3M.
"Health care, one of the most dynamic segments of 3M, regularly generates an operating margin of around 30% and is a platform for priority growth," said analysts in a brief note.
Patrick Danner is a San Antonio-based editor who covers banking and civil courts. Read it on our free website, mySA.com, and on our subscriber site, ExpressNews.com. | [email protected] | Twitter: @AlamoPD
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