Post a hotly contested bidding process, KKR has emerged as the front-runner to acquire rival Apax Partners promoted Healthium Medtech (earlier called Sutures India Pvt Ltd), in a big-bang deal which is likely to value the medical devices firm between $750 mn to $850 mn, multiple industry sources in the know told Moneycontrol.
On March 7, Moneycontrol was the first to report that the US global private equity major was a suitor for the Bengaluru based Healthium Medtech.
"Post submission of binding bids by all the parties, KKR has emerged as the lead contender and edged ahead of the two other final stage suitors. Apax is looking at an exit after around six years," said one of the persons above. A consortium of ChrysCapital & Mankind Pharma and Danish pharma major Novo Nordisk are the two other suitors in the last leg of the deal.
In 2018, British private equity firm Apax Partners acquired Healthium Medtech from investors including TPG Growth and CX Partners. Back then, reports had pegged the firm's valuation at around $350 million.
A second person confirmed KKR's status as the current favourite to clinch the deal along with the proposed valuation. He added that a final agreement was likely to be signed shortly followed by an official announcement. Both the persons above spoke to Moneycontrol on the condition of anonymity.
Incidentally, KKR has an existing business relationship with Healthium Medtech as the latter had inked a pact in December 2022 to sell its UK subsidiary to the US investment giant.
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Upon reaching out, Apax Partners opted not to provide a comment. Similarly, KKR refrained from commenting on market speculation. Jefferies, the investment bank overseeing the sale process, was also unavailable for an immediate response.
The March 7 report of Moneycontrol indicated that the Healthium Medtech sale process would generate strong interest as the firm is a leading domestic player in the surgical sutures category and also a prominent global player in the segment.
The report added, " There is a lot of interest in this transaction as there are not too many medical devices businesses of this scale and size up for grabs in the market. Healthcare consumer spending proxy seems to be the broader investment thesis for all suitors. If healthcare spending goes up, then the segment of medical devices will do well too. Healthium Medtech has the same characteristics as Indira IVF - high margins, high RoC ( not capital intensive) and good growth."
Last year, private equity firm EQT announced the acquisition of India's largest IVF (in vitro fertilisation) speciality clinic chain Indira IFV.
On July 22, Moneycontrol was the first to report that the Sweden-headquartered investment firm had the edge over other suitors in the race to acquire Indira IVF in a transaction expected to value the latter at $1 billion.
Apax Partners was earlier exploring a public listing for the asset but later shifted to a sale process. Sahajanand Medical Technologies, which is backed by Morgan Stanley PE, and Lotus Surgicals, backed by Murugappa Group and Premji Invest, are some of the other players in the domestic medical devices space.
Healthium Medtech: A closer look
The company manufactures and sells wound closure products such as absorbable and non-absorbable sutures, mesh, tapes, skin staplers, and ligation clips along with medical consumables like surgical gloves, tubular bandages and catheters.
The export market for these products is spread over 90 countries in Europe, South America, Africa and Asia. Healthium Medtech has seven manufacturing facilities and three R&D centres.
According to a January 31 report by rating agency ICRA, the company registered a revenue of Rs 393.4 crore and a profit of Rs 68.9 crore in H1 FY24. It 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.
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