TPG Buys Orthopaedic Device Maker
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TPG Buys Orthopaedic Device Maker

Publicly-traded Exactech has been acquired by TPG Capital for approximately $737 million. TPG had originally offered to acquire Exactech for $625 million in October 2017 but raised the valuation in December 2017 in response to an unsolicited bid from another private equity firm.

Exactech (NASDAQ: EXAC) develops and markets orthopaedic implant devices that are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. The company also provides surgical instruments and biologic materials and services to hospitals and physicians. Exactech markets its products in the United States and in more than 30 markets in Europe, Latin America, Asia and the Pacific.

Exactech was founded in 1985 by orthopaedic surgeon Dr. Bill Petty, his wife Betty and biomedical engineer Gary Miller, PhD, with the purpose of improving the quality of care for patients suffering from joint injury or disease. The company employs more than 700 individuals including engineers, researchers, manufacturing professionals, and sales representatives. Exactech is headquartered in Gainesville, FL (www.exac.com).

The reported trailing four-quarter revenues (ending 9/30/17) of Exactech were $264 million with an EBITDA of $43 million. This results in a 17.1x valuation multiple.

“As long-term healthcare investors, we aim to identify and partner with strong companies that are in growing, attractive sectors,” said Todd Sisitsky, Managing Partner at TPG Capital. “With their strong commitment to patients and surgeons and a comprehensive product portfolio, Exactech has strategically built a platform poised for significant growth. We are thrilled to partner with CEO David Petty, the company founders, the Exactech management team and TPG Capital advisors Jeff Binder and Dan Hann to further realize Exactech’s exciting potential.”

TPG was founded in 1992 and makes investments throughout North America, Europe, Asia and Australia.  Sectors of interest include industrials, retail, consumer, financial services, travel and entertainment, technology, media and communications, and healthcare.  In May 2016, TPG held a final close of its latest fund, TPG Partners VII, LP, with $10.5 billion in commitments. The firm has offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul, and Singapore (www.tpg.com).

“The basis of our investment thesis is that there are outstanding opportunities for nimble, innovative and responsive companies to invest in growth and compete with the larger competitors in the orthopaedic industry,” said Jeff Binder, Senior Advisor to TPG Capital. “I look forward to working with management to fully realize the potential of a company for which I have always had great respect.”

J.P. Morgan Securities was the financial advisor to Exactech.

© 2018 Private Equity Professional | February 16, 2018

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