PE Firms Sued by Biomet Shareholder

A Biomet Inc. shareholder has sued four private equity firms — Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and Texas Pacific Group — and the company’s board of directors over a proposed $10.9 billion buyout. You can read the complaint here: Lawsuit against Biomet and Four PE Funds.pdf

The lawsuit’s claims are typical of shareholder gripes when LBO firms try buying publicly traded companies, including “willful, reckless and wanton violations” of the fiduciary duties of the company by the board of directors in the agreement to sell. The suit also claims that Biomet’s board approved a sale price that was too cheap, did not adequately shop the company and did not disclose adequate information to shareholders about the company’s financial status.

Dom DeChiara, head of private equity with law firm Nixon Peabody, said: “These lawsuits come 99 out of 100 times and are settled 95 out of 100 times.” The plaintiff is seeking a settlement payment and ideally a boost in the price, which DiChiara added does happen in some cases.

Subscribers to Buyouts Magazine can read more on the suit over at www.BuyoutsNews.com.