Apax to make more than 3x on Acelity

  • Apax-led group bought predecessor in $6.1 bln LBO in ’11
  • Acelity is No. 1 advanced wound care company
  • Apax in February sold Exact Software, AssuredPartners

Apax Partners is poised to generate a more than 3x multiple of invested capital through the $6.7 billion sale of Acelity to 3M, according to a source familiar with the matter.

The selling consortium also includes Canada Pension Plan Investment Board and Public Sector Pension Investment Board. The group acquired Acelity’s predecessor Kinetic Concepts Inc in a $6.1 billion leveraged buyout in 2011.

For Apax, the return reflects Acelity’s $2.9 billion divestiture of LifeCell to Allergan in 2017 and its $275 million sale of its Therapeutic Support Systems business to Getinge AB in 2012, the source said.

For 3M, the deal is the multinational conglomerate’s largest in history. Upon completion of the transaction, Acelity’s KCI-branded products will operate under 3M’s medical solutions business.

San Antonio, Texas-based Acelity is the world’s largest maker of advanced wound care and specialty surgical products, serving some 90 countries.

Under the Apax-led investor group, the company has evolved as both a buyer and seller of assets over the years. Notably, the company in October 2013 bought rival Systagenix for $485 million. In June 2018, it scooped up Crawford Healthcare, a U.K. wound care and dermatology company.

The company has also invested in R&D and clinical education, creating new technology such as the Prevena system for managing closed incisions after surgery.

The sale to 3M comes after Acelity considered an initial public offering, with its affiliate KCI Holdings having filed an S-1 in April. The company previously ditched its plans to go public in 2016, citing current market conditions.

Apax has deep roots in medtech, with investments including Candela, Vyaire and Healthium. The firm sold Molnlycke to Investor AB in 2007 for €2.85 billion ($3.18 billion).

Apax in February sold its stakes in Exact Software and AssuredPartners to KKR and GTCR, respectively.

Action Item: Check out Apax’s latest Form ADV: https://bit.ly/2LiIKXK