Bloomberg News

Kinetic to Proceed With Apax After Counterbidder Drops Offer

October 03, 2011

(Updates with reason for dropped bid in second paragraph.)

Oct. 3 (Bloomberg) -- Kinetic Concepts Inc., the San Antonio-based wound-care company, said it will proceed with a proposed buyout by Apax Partners LLP for $6.5 billion after a counterbidder dropped its offer.

Kinetic didn’t name the counterbidder in a filing today with the U.S. Securities and Exchange Commission. Competitor ConvaTec Inc. made a higher offer in August, people with knowledge of the matter said at the time. Convatec pulled its offer due to difficulty and growing costs in lining up the financing, said a person familiar with the matter.

Apax Partners, the London-based private equity firm, and two Canadian pension funds agreed in July to buy Kinetic for $68.50 a share and said they would borrow as much as $5 billion to do so.

Kinetic will host a lender meeting Oct. 5 at 9:30 a.m. in New York to discuss the buyout financing, according to another person with knowledge of the transaction.

Bank of America Corp., Morgan Stanley, Credit Suisse Group AG and Royal Bank of Canada are arranging the deal, which will include a $2.6 billion term loan and a $200 million revolving line of credit, said the person, who declined to be identified because the terms are private.

The transaction includes bridge financing consisting of $1.25 billion of senior secured notes and $900 million of senior unsecured bonds, according to data compiled by Bloomberg.

Kevin Belgrade, a spokesman for Kinetic, didn’t immediately return a phone call seeking comment. A message left with ConvaTec wasn’t returned.

--With assistance from Jeffrey McCracken and Michael Amato in New York. Editors: Elizabeth Wollman, Andrew Pollack

To contact the reporter on this story: Elizabeth Wollman in San Francisco at; Krista Giovacco in New York at

To contact the editor responsible for this story: Jennifer Sondag at

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