Clayton, Dubilier & Rice has signed an agreement to acquire Healogics Holding Corp., the largest advanced wound care services provider in the US, from Metalmark Capital and Scale Venture Partners. The transaction is valued at $910 million and is expected to close in the second or third quarter of 2014.
“Healogics is the clear market leader in hospital outpatient wound care services which is a large, underserved market with sustainable long-term growth,” said CD&R Partner Kenneth Giuriceo. “We look forward to partnering with the company’s talented management team to continue to serve the increasing trend towards hospital outsourcing and the growing wound care population.”
Healogics operates nearly 600 hospital outpatient Wound Care Centers, or roughly one-third of all hospital outpatient wound care centers in the US, and treated over 215,000 patients in 2013. In addition, the company operates Sechrist Industries, a global manufacturer of hyperbaric oxygen therapy chambers used in advanced wound care. Healogics had approximately $300 million in sales in 2013. The company has more than 2,000 employees and is headquartered in Jacksonville, FL (www.healogics.com).
“Healogics offers a strong, demonstrable value proposition for patients, hospitals and payors, which are the key elements we look for when making healthcare-related investments,” said CD&R Partner Richard Schnall. “The company’s specialized wound care services result in a 91% heal rate and 94% patient satisfaction rate. Importantly, effective wound care helps payors avoid significant costs associated with the escalation in severity of wound-related incidents.”
Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $19 billion in 59 businesses representing a range of industries with an aggregate transaction value of approximately $90 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York and London (www.cdr-inc.com).
“CD&R is well-known as a business builder, and has deep experience in closely related healthcare models,” said Healogics President and CEO Jeff Nelson who will continue to lead the company. “The firm shares our growth vision for the company and deep commitment to look for innovative ways to reach and treat people with chronic wounds everywhere we can, by the best means available.”
J.P. Morgan Securities, Credit Suisse, BofA Merrill Lynch, Citigroup Global Markets, and Morgan Stanley have committed to providing debt financing for the transaction. J.P. Morgan, Credit Suisse Securities, BofA Merrill Lynch, Citi and Morgan Stanley acted as financial advisors to CD&R.
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-22-14