KCI to Sell in $6.3 Billion Deal

SAN ANTONIO — Wound care products maker Kinetic Concepts
Inc. announced July 13 it has agreed to a leveraged buyout valued
at $6.3 billion, including the company’s outstanding debt.

The 35-year old company, which reported 2010 revenues of $2
billion, will be acquired by a consortium including London-based
private equity investor Apax Partners for $68.50 a share in
cash.

“This consortium is a group of well-respected investors whose
interest in KCI represents an endorsement of our market leadership,
differentiated products and services and consistently strong
performance,” KCI President and CEO Catherine Burzik said in a
release.

KCI’s board of directors has unanimously approved the merger
agreement, although the company has a 40-day “go-shop” period under
which it can solicit other offers. A group of shareholders
including Dr. James Leininger, KCI’s founder and chairman emeritus,
holds approximately 11 percent of the company’s outstanding shares
and will vote in favor of the transaction.

KCI makes products for the wound care, tissue regeneration and
therapeutic support system markets, including its widely used VAC
negative pressure wound therapy system. The company employs
approximately 7,100 people and markets its products in more than 20
countries.

According to a statement from Apax, the consortium “plans to
work actively in partnership with the management of KCI to further
invest in the global medical products sector to expand the
company’s core business, develop innovative products and extend
into new geographies where significant opportunities exist.”

Apax investments total more than $40 billion around the world,
including Tommy Hilfiger, Phillips-Van Heusen, Voyager HospiceCare
and Apollo Hospitals, a leading hospital chain in India. The buyout
group also includes affiliates of two Canadian pension funds,
Canada Pension Plan Investment Board and the Public Sector Pension
Investment Board.

The transaction is expected to close in the second half of the
year.