Kinetic Concepts Inc. agreed to be acquired for $4.98 billion in cash by a group including private equity firm Apax Partners LLP, the C$148.2 billion (US$154.5 billion) Canada Pension Plan Investment Board, Toronto, and the C$50.8 billion Public Sector Pension Investment Board, Montreal, in the biggest leveraged buyout since the collapse of Lehman Brothers Holdings Inc.
Stockholders will receive $68.50 a share, the San Antonio-based maker of wound-care products and hospital beds said in a statement Wednesday. The price is 6.2% above Tuesday's close on the New York Stock Exchange, and 17% above July 5, the day before Bloomberg News reported the company was in talks on a buyout.
Kinetic rose $3.52, or 5.5%, to $68.01 at 10:12 a.m. EDT in New York Stock Exchange composite trading. The shares had gained 54% this year before Wednesday.
“It's a pretty good deal for shareholders,” said Spencer Nam, a Boston-based analyst for Madison Williams & Co., in a telephone interview. “I don't think there's going to be a higher bidder.”
Kinetic's price tag of $6.3 billion when assumed debt is included surpasses the $5.68 billion takeover of Del Monte Foods Co. to become the biggest private equity LBO since New York-based Lehman filed for bankruptcy protection in September 2008.
Apax, which manages a €11.2 billion fund ($15.8 billion) and is on the road to raise another €9 billion from investors, is joining other firms including KKR & Co. and Blackstone Group LP in resuming purchases after the credit crisis brought deal-making nearly to a halt for two years. Private equity firms have announced $234 billion of deals this year, more than double the amount in the same period last year, according to Bloomberg data, as banks resumed lending to fund acquisitions.