Apax Funds, CPPIB and PSP Investments Agree to Sell Acelity and its KCI Subsidiaries to 3M for $6.725 Billion
KCI is a Leading Global Medical Technology Company Focused on
Advanced Wound Care and Specialty Surgical Applications
SAN ANTONIO & NEW YORK–(BUSINESS WIRE)–A consortium comprised of funds advised by Apax Partners (the “Apax
Funds”), together with Canada Pension Plan Investment Board (“CPPIB”)
and the Public Sector Pension Investment Board (“PSP Investments”),
today announced that it has entered into a definitive agreement to sell
Acelity, Inc. and its KCI subsidiaries worldwide to 3M for approximately
$6.725 billion. KCI markets a broad range of negative pressure wound
therapy, specialty surgical and advanced wound dressing products in
approximately 90 countries.
Since 2011, Apax Partners, CPPIB and PSP Investments worked closely with
Acelity/KCI’s senior leadership team to transform the business into a
leading global company focused on advanced wound care and specialty
surgical solutions. The company’s strategic M&A program included
targeted acquisitions, such as Systagenix, in 2013, and Crawford
Healthcare, in 2018, and disposals of non-core businesses, such as the
LifeCell business unit, which was sold for $2.9 billion in 2017, and the
Therapeutic Support Systems (TSS) unit, which was sold in 2012. The
company also has undertaken a range of organic growth initiatives
including investments in R&D, clinical studies, and the expansion of its
sales force.
The product offering includes the KCI-branded negative pressure wound
therapy, advanced wound dressings, and negative pressure surgical
incision management systems. The company’s industry-leading brands
include V.A.C.® Therapy, PREVENA™ Therapy and PROMOGRAN PRISMA™ Matrix,
as well as the iOn Digital Health platforms. Upon completion of the
transaction, KCI will become an integral part of 3M’s Medical Solutions
business, which applies 3M science to deliver safe and effective
solutions that improve clinical outcomes and healthcare economics.
“Today, KCI embarks upon a new era in its long history as a pioneer in
healthcare,” said R. Andrew Eckert, CEO of Acelity. “The combination of
KCI with 3M will accelerate the reach of a business that is a leader in
innovation, customer experience and clinical and economic evidence.
Backed by the resources and expertise of 3M, KCI will be
able to offer clinicians and patients even more compelling solutions
designed to speed healing and improve outcomes. I would like to thank
Apax, CPPIB and PSP Investments for their close partnership and
strategic direction over the years shaping KCI into a premier global
advanced wound care company.”
Steven Dyson, Chairman of the Board of Acelity and Partner at Apax
Partners, said, “We are proud of our close work with management to
successfully transform KCI through a range of growth initiatives,
including an M&A program, that enhanced the Company’s strategic
direction. We believe the business will have a great future with 3M.
Lastly, we are grateful for the opportunity to have joined in this
highly successful investment with CPPIB and PSP, two long-standing
investors in the Apax Funds.”
“CPPIB is pleased to have supported KCI’s delivery of medical devices
and products that benefit millions of patients around the world. During
our investment, the company helped restore lives with the launch of
innovative solutions and expansion into new geographies,” said Ryan
Selwood, Managing Director, Head of Direct Private Equity, CPPIB.
“We are proud to have supported KCI and its management team during its
exciting transformation journey, in partnership with Apax and CPPIB,”
said Simon Marc, Managing Director and Head of Private Equity, PSP
Investments. “KCI has successfully invested into novel organic growth
initiatives and we are confident about its continued growth prospects
with 3M.”
The transaction will be effected through the sale of Acelity, Inc., a
direct wholly-owned subsidiary of Acelity L.P. Inc., and is expected to
close in the second half of 2019, subject to customary closing
conditions and regulatory approvals.
JP Morgan and Goldman Sachs are acting as financial advisors to the
consortium. Simpson Thacher & Bartlett LLP and Jackson Walker LLP are
acting as legal advisors to the consortium.
About KCI, an Acelity Company
KCI, an Acelity Company, is a well trusted brand in advanced wound care.
We are a leader in negative pressure wound therapy, providing solutions
for both wound healing and surgical management. Our product
offerings are available in more than 90 countries and deliver value
through solutions that speed healing. KCI is a leader in quality, safety
and customer experience and is committed to advancing the science of
healing. Headquartered in San Antonio, Texas, KCI employs approximately
4,500 people worldwide.
About Apax Partners
Apax Partners is a leading global private equity advisory firm. Over its
more than 40-year history, Apax Partners has raised and advised funds
with aggregate commitments of over c.$50 billion. The Apax Funds invest
in companies across four global sectors of Healthcare, Tech & Telco,
Services, and Consumer. These funds provide long-term equity financing
to build and strengthen world-class companies. For more information see: www.apax.com.
In Healthcare, the Apax Funds have invested c.$8 billion of equity
across medical devices, pharmaceuticals, healthcare services and
healthcare IT. Within the medical devices sub-sector, the Apax
Healthcare team has partnered with a variety of businesses such as
Mӧlnlycke, Vyaire Medical, Candela and Healthium to create strategic
leaders in their space.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional
investment management organization that invests the funds not needed by
the Canada Pension Plan (CPP) to pay current benefits on behalf of 20
million contributors and beneficiaries. In order to build a diversified
portfolio of CPP assets, CPPIB invests in public equities, private
equities, real estate, infrastructure and fixed income instruments.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg,
Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and
managed independently of the Canada Pension Plan and at arm’s length
from governments. At December 31, 2018, the CPP Fund totalled C$368.5
billion. For more information about CPPIB, please visit www.cppib.com
or follow us on LinkedIn,
Facebook
or Twitter.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of
Canada’s largest pension investment managers with C$158.9 billion of net
assets as of September 30, 2018. It manages a diversified global
portfolio composed of investments in public financial markets, private
equity, real estate, infrastructure, natural resources and private debt.
Established in 1999, PSP Investments manages net contributions to the
pension funds of the federal Public Service, the Canadian Forces, the
Royal Canadian Mounted Police and the Reserve Force. Headquartered in
Ottawa, PSP Investments has its principal business office in Montréal
and offices in New York, London and Hong Kong. For more information,
visit investpsp.com
or follow us on Twitter and LinkedIn.
Contacts
Acelity Media Relations:
Cheston Turbyfill,
VP,
Corporate Communications Acelity
cheston.turbyfill@acelity.com
+1
312-952-0837
Acelity Investor Relations:
David
Clair, CFA,
Westwicke Partners
investors@acelity.com
+1-646-277-1266
Apax
Partners:
Global Media: Andrew Kenny, Apax | +44 20 7 872 6371
| andrew.kenny@apax.com
USA
Media: Todd Fogarty, Kekst | +1 212-521 4854 | todd.fogarty@kekst.com
UK
Media: Matthew Goodman, Greenbrook | +44 20 7952 2000 | apax@greenbrookpr.com
CPPIB:
Darryl
Konynenbelt
+1 416-972-8389
dkonynenbelt@cppib.com
PSP
Investments:
Verena Garofalo
+1 (514) 218-3795
media@investpsp.com
