KKR Emerges as Frontrunner for $750-850M Healthium Medtech Acquisition

KKR emerges as lead contender to acquire Healthium Medtech for $750-850 million, edging out ChrysCapital & Mankind Pharma and Novo Nordisk. Apax Partners is exiting Healthium Medtech after six years, having acquired it for $350 million in 2018.

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KKR Emerges as Frontrunner for $750-850M Healthium Medtech Acquisition

KKR Emerges as Frontrunner for $750-850M Healthium Medtech Acquisition

US private equity firm KKR has emerged as the lead contender to acquire Healthium Medtech, a medical devices companypromoted by Apax Partners, in a deal valued between $750 million and $850 million. After a highly competitive bidding process, KKR has edged ahead of two other final stage suitors, a consortium of ChrysCapital & Mankind Pharma and Danish pharma major Novo Nordisk.

Why this matters: This deal has significant implications for the medical devices sector in India, as it could drive further growth and expansion in the industry. The acquisition also highlights the growing importance of healthcare consumer spending, which is expected to increase in the coming years.

Apax Partners is looking to exit Healthium Medtech after around six years, having acquired the firm in 2018 for around $350 million. A final agreement is likely to be signed shortly, followed by an official announcement. The deal is significant, as there are not many medical devices businesses of this scale and size up for grabs in the market.

Healthium Medtech, formerly known as Sutures India Pvt Ltd, is a leading domestic player in the surgical sutures category and a prominent global player in the segment. The firm manufactures and sells wound closure products and medical consumables, with an export market spread over 90 countries. Healthium Medtech has seven manufacturing facilities and three R&D centres.

According to a report by rating agency ICRA, Healthium Medtech registered a revenue of Rs 393.4 crore and a profit of Rs 68.9 crore in H1 FY24. The company reported a revenue of Rs 728.5 crore in FY23 and a profit of Rs 112.9 crore during the period, excluding a one-time gain of Rs 490.3 crore from a subsidiary sale.

The healthcare consumer spending proxy is the broader investment thesis for all suitors, as healthcare spending is expected to increase, driving growth in the medical devices segment. In December 2022, Healthium Medtech inked a pact to sell its UK subsidiary to KKR, signaling the private equity firm's interest in the company.

The acquisition of Healthium Medtech by KKR, if finalized, would mark a significant deal in the medical devices sector in India. With the company's strong domestic presence and global reach, the deal could potentially drive further growth and expansion for Healthium Medtech under KKR's ownership.

Key Takeaways

  • KKR emerges as lead contender to acquire Healthium Medtech for $750-850 million.
  • Deal marks significant growth opportunity for India's medical devices sector.
  • Healthium Medtech is a leading domestic player in surgical sutures and a global player.
  • The company has 7 manufacturing facilities, 3 R&D centers, and exports to 90 countries.
  • Acquisition driven by growing healthcare consumer spending and medical devices growth.