Wound care product maker Kinetic Concepts Inc. said Wednesday it agreed to be acquired by a private equity firm and two investment groups in a deal that values the company at $4.98 billion, or $68.50 per share.
The San Antonio company said it accepted the offer to go private from Apax Partners, the Canada Pension Plan Investment Board and the Public Sector Pension Investment Board. The deal is worth $6.3 billion including debt.
Kinetic Concepts' board approved the deal and recommended stockholders tender their shares in the offer. The company's founder and chairman emeritus, James Leininger, supports the deal and will vote his shares in favor. Including funds controlled by shareholders related or affiliated with Leininger, he has an 11-percent stake in the company.
Kinetic Concepts makes products that treat wounds using low pressure to speed healing as well as other tissue-repair products. It has said it expects $2.05 billion to $2.09 billion in revenue in 2011. The consortium said it plans to make investments to expand the company's core business.
Speculation over a buyout has driven up the company's stock in the past week, with shares rising 12.6 percent on July 6. The offer comes at a premium of 16.5 percent to the price of Kinetic Concepts on July 5, and the company said it is getting a premium of 52 percent based on its average closing price over the 12 months ended July 5.
Shares closed at $64.49 Tuesday, and the stock rose $3.64, or 5.6 percent, to $68.12 in afternoon trading. In the last week, the stock has been trading at its highest prices in about four years.
The company has 40 days to seek competing offers, but Mizuho Securities analyst Michael Matson believes there is a "very small chance" of a higher bid for Kinetic Concepts. Matson said in a note he expects private equity firms to make more deals for health care and medical technology companies in the next six months to a year. On July 5, blood screening system maker Immucor Inc. accepted a bid from TPG Capital worth $1.97 billion, or $27 per share.