By Clyde A. Burkhardt
London-based Smith & Nephew, a diversified producer of orthopedic, endoscopy devices, and other medtech products, established a significant position in the fast-growing bioactive wound care market with the $782-million (4.1x sales of $190 million and 23x estimated EBITDA of $34 million) acquisition of U.S.-based HealthPoint Biotherapeutics, a leader in bioactive debridement, dermal repair, and regenerative wound-care treatments. Healthpoint has substantial intellectual property and R&D expertise in next-generation bioactive therapies.
Another large wound care transaction was Kinetic Concepts’s acquisition of UK-based Systagenix, a long-established provider of a large portfolio of advanced would-care products, including PROMOGRAN PRISMA, the collagen market leader. Many of Systagenix’s products are complementary to Kinetic’s core negative-pressure wound care products. The $485-million acquisition is a major step in Kinetic’s announced goal to diversify and expand its global geographic footprint in the estimated $3.5-billion advanced wound-care market. The seller was One Equity Partners, a private equity fund that acquired Systagenix from Johnson & Johnson in 2008.
In the soft-tissue repair segment, Integra Life Sciences reached a definitive agreement to acquire Confluent Surgical Inc. from Covidien Plc for $235 million (3.6x sales of $65 million). Confluent’s proven line of repair products include Duraseal, Vasoseal, and Sprayshield. The Confluent operation did not fit with Covidien’s global priorities and is complementary to Integra’s neurosurgery and spine surgery products
C.R. Bard announced an agreement in August to acquire Medafor Inc. for $200 million plus a potential $80 million if certain milestones are achieved through June 2015. Medafor is the producer of Arista Mott Hemostat, a hemostatic agent that contracts bleeding in patients on whom more conventional methods cannot be used. The global market for surgical hemostats is estimated to be $1.4 billion. In September, C.R. Bard announced an agreement to acquire Rochester Medical Corp., which produces silicone urinary incontinence and urine drainage products and is known for its very effective customer access program. The price was about $250 million.
Clyde A. Burkhardt is senior managing director of HT Capital Advisors LLC (New York City), a private investment banking firm. He leads HT Capital Advisors' groups focusing on the medical device, healthcare services, and precision component industries. Contact Burkhardt at [email protected].