Five Largest PE-Backed Healthcare Buyout Deals 2011 – April 2012

by Jessica Hull

  • 05 Apr 2012
  • PE

In 2012 YTD (as of 5th April 2012), there have been 76 private equity-backed buyout deals announced in the healthcare industry, valued at an aggregate $3.7bn. The previous year recorded 325 healthcare buyout deals, which is the highest number of private equity-backed buyout deals in the sector since 2006. The aggregate value of deals in healthcare during 2011 experienced a strong recovery, with a peak in aggregate value since the onset of the financial crisis. In this week’s blog, we examine the five largest buyouts globally in the healthcare sector for 2011 – 2012 YTD.

 #5 - Immucor, Inc.

The $1.97bn privatisation of Immucor was announced in July 2011. The company was taken private by TPG which completed the transaction in August 2011. Citigroup and JPMorgan provided financing for the deal. The debt financing consisted of a $600mn senior secured term loan facility, a $400mn senior unsecured bridge facility and a five-year $100mn revolver.

#4 - Capsugel

The $2.38bn cash acquisition of Capsugel represented the fourth largest healthcare buyout from 2011 – 2012YTD. It was announced that Capsugel would be acquired by KKR from Pfizer in April 2011, and this transaction was completed in the third quarter of 2011. Pfizer's financial advisors for the transaction were Morgan Stanley and Guggenheim Securities. Cadwalader, Wickersham & Taft and White & Case acted as legal counsel for the seller and Simpson Thacher & Bartlett acted as legal counsel for the buyer.

#3 - Emergency Medical Services

The privatisation of Emergency Medical Services represents the third largest private equity-backed buyout deal in the healthcare sector in the period. In February 2011, Clayton Dubilier & Rice entered into a definitive agreement to acquire Emergency Medical Services Corporation for approximately $3.2bn, including the assumption of debt, and the acquisition was completed three months later. Clayton Dubilier & Rice's acquisition company received a debt commitment letter for debt financing of up to $2.675bn from Barclays Bank, Deutsche Bank, Bank of America, Morgan Stanley, Royal Bank of Canada, RBC Capital Markets, UBS and Citigroup Global Markets.

#2 - Pharmaceutical Product Development, Inc.

In October 2011, it was announced that Hellman & Friedman had joined fellow industry giant Carlyle Group in a definitive merger agreement to acquire Pharmaceutical Product Development (PPD). This is the second largest buyout in the healthcare industry from 2011 – 2012 YTD; valued at $3.9bn. Under the terms of the deal, the firms paid $33.25 a share in cash, nearly a 30% premium to the share price at the time offering, which was $25.66 a share. The deal was completed in December 2011 when PPD became a privately held company and its stock was delisted from the NASDAQ.

#1 - Kinetic Concepts, Inc.

The privatisation of Kinetic Concepts, Inc. represents the largest healthcare private equity equity-backed buyout in the period. The deal, which was previously announced in July 2011, was completed in November 2011. The company was acquired by an investor consortium comprised of Apax Partners, Canada Pension Plan Investment Boards and the Public Sector Pension Investment Board for $6.3bn, including outstanding debt. This deal represents the fourth largest deal recorded from 2006 to present.

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