Sector News

ConvaTec owners appoint banks to explore sale – sources

October 15, 2014
Chemical Value Chain
(Reuters) – ConvaTec’s owners have appointed Morgan Stanley and Goldman Sachs to explore a sale of the medical device maker which could be worth up to $10 billion, sources familiar with the matter said.
 
Private equity firms Avista Capital Partners and Nordic Capital are preparing the groundwork for a possible sale or initial public offering (IPO) in 2015 for the Luxembourg-based company, said the sources who spoke on condition of anonymity because the process is private.
 
Mergers and acquisitions in the healthcare space have hit a record pace so far this year, in part driven by U.S. companies seeking to redomicile in countries that have a lower corporate tax rate, in a practice known as inversion.
 
Kimberley-Clark and 3M are considered likely bidders for ConvaTec, said the sources, adding that the U.S. firms’ interest was not motivated by tax inversion issues.
 
ConvaTec, Nordic Capital, 3M, Goldman Sachs and Morgan Stanley declined to comment. Kimberley Clark and Avista Capital did not immediately respond to requests for comment.
 
Reuters reported in August that some U.S. companies including diversified manufacturer 3M and medical equipment makers CareFusion Corp and C.R. Bard Inc were potentially exploring a deal, but that ConvaTec wanted to boost its value further before launching an auction or IPO.
 
CareFusion has since been swallowed by medical equipment supplier Becton Dickinson & Co for $12.2 billion, taking them out of the field.
 
Also, in recent weeks equity markets have stumbled and the market for IPOs has stalled.
 
Avista Capital Partners and Nordic Capital acquired ConvaTec from Bristol-Myers Squibb Co in 2011 for $4.1 billion. 3M and Kimberley-Clark were among the contenders for ConvaTec at the time, according to people familiar with the matter.
 
ConvaTec reported earnings before interest, tax, depreciation and amortization (EBITDA) of $502.5 million in 2013, up 15 percent year-on-year. It is hoping to exceed $600 million in EBITDA this year, sources have said.
 
The company makes wound care and ostomy care products at 11 manufacturing sites in eight countries, and sells them in more than 100 countries.
 
BY SOPHIE SASSARD AND ANJULI DAVIES (Editing by Pravin Char)

Related News

May 8, 2021

Nouryon announces intention to spin-out Nobian, its base chemicals business, strengthening focus on key growth end-markets

Chemical Value Chain

The separation is expected to be completed by early Q3, following the receipt of all relevant approvals, including final Board approval. Nouryon intends to reduce its own debt with proceeds received from a planned external financing by Nobian.

May 8, 2021

US Trinseo seeks to build Asian PMMA plant, compounding line

Chemical Value Chain

Trinseo became a producer of the resin when it acquired Arkema’s PMMA business. It announced that it closed on the €1.14bn deal earlier this month.

May 8, 2021

SIG unveils tethered caps for carton packs ahead of EU’s Single-Use Plastics Directive

Chemical Value Chain

As part of the EU’s Single-Use Plastic Directive (SUPD), it will become mandatory for caps and lids to remain attached to all beverage containers up to three liters in capacity from 2024.

Send this to a friend