Clayton, Dubilier & Rice to acquire Healogics

Clayton, Dubilier & Rice is to acquire Healogics Holding Corp from Metalmark Capital and Scale Venture Partners. The transaction is valued at $910 million. Healogics is a wound care services provider.

PRESS RELEASE

Clayton, Dubilier & Rice today announced an agreement under which CD&R-managed funds will acquire Healogics Holding Corp., the largest advanced wound care services provider in the U.S., from Metalmark Capital and Scale Venture Partners. The transaction is valued at $910 million. Additional terms were not disclosed.
Headquartered in Jacksonville, Florida with approximately $300 million in sales and more than 2,000 employees, Healogics operates nearly 600 hospital outpatient Wound Care Centers®, or roughly one-third of all hospital outpatient wound care centers in the U.S., and treated over 215,000 patients in 2013. In addition, the company operates Sechrist Industries, the leading global manufacturer of hyperbaric oxygen therapy chambers (“HBOTCs”) used in advanced wound care. Inc. magazine recently named Healogics, Inc. on its exclusive ranking of the nation’s fastest-growing private companies and was recognized on Modern Healthcare’s list of ‘Healthcare’s Hottest’ companies for 2013.
“Healogics is the clear market leader in hospital outpatient wound care services which is a large, underserved market with sustainable long-term growth,” said CD&R Partner Kenneth A. Giuriceo. “We look forward to partnering with the company’s talented management team to continue to serve the increasing trend towards hospital outsourcing and the growing wound care population.”
“Healogics offers a strong, demonstrable value proposition for patients, hospitals and payors, which are the key elements we look for when making healthcare-related investments,” said CD&R Partner Richard J. Schnall. The company’s specialized wound care services result in a 91% heal rate and 94% patient satisfaction rate. Importantly, effective wound care helps payors avoid significant costs associated with the escalation in severity of wound-related incidents.
“CD&R is well-known as a business builder, and has deep experience in closely related healthcare models,” said Healogics President and CEO Jeff Nelson who will continue to lead the company. “The firm shares our growth vision for the company and deep commitment to look for innovative ways to reach and treat people with chronic wounds everywhere we can, by the best means available.”
The transaction is expected to close in the second or third quarter of 2014.
J.P. Morgan Securities LLC, Credit Suisse, BofA Merrill Lynch, Citigroup Global Markets, Inc. and Morgan Stanley have committed to providing debt financing for the transaction. Debevoise & Plimpton LLP acted as legal advisor and J.P. Morgan, Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citi and Morgan Stanley acted as financial advisors to CD&R.

About Clayton, Dubilier & Rice
Founded in 1978, Clayton, Dubilier & Rice is a private equity firm with an investment strategy predicated on producing financial returns through building stronger, more profitable businesses. Since inception, CD&R has managed the investment of $19 billion in 59 U.S. and European businesses with an aggregate transaction value of approximately $90 billion.

About Healogics
Headquartered in Jacksonville, Fla., Healogics is the nation’s largest provider of advanced wound care services. Healogics and its affiliated companies manage nearly 600 Wound Care Centers® in the nation and saw more than 200,000 patients in 2013 through a connected network of centers, partner hospitals, academic medical centers, patients and families. Leveraging its scale and experience, Healogics utilizes an evidence-based systematic approach to chronic wound healing in treating an underserved and growing patient population.

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