medical products distribution

MTS Exits Woodbury Health Products

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MTS Health Investors has completed the sale of its portfolio company, Woodbury Health Products, to publicly-traded ConvaTec Group. MTS acquired Woodbury in March 2012 from Health Edge Investment Partners.

Woodbury is a distributor of incontinence and catheter-related supplies with a product portfolio of over 500 incontinence SKUs and over 650 catheter SKUs. The company also sells nutritional, enteral feeding, and vascular compression supplies. Woodbury has nationwide distribution capabilities and delivers directly to the homes of its customers through a distribution center in Wilmington, NC. In April 2016, MTS completed and add-on acquisition for Woodbury with the buy of Advanced Medical Group, a Suwanee, GA-based distributor of home urological supplies. Woodbury is led by CEO Seth Segel and is headquartered on Long Island in Floral Park, NY (www.woodburyproducts.com).

“MTS has been an outstanding partner for Woodbury, and we are grateful for their commitment to improving and growing our business,” said Mr. Segel. “By partnering with ConvaTec, we will have access to even greater resources backed by a robust infrastructure to serve our customers and continue to provide them with the tailored and seamless solutions they depend on.”

ConvaTec Group (LSE: CTEC) is an international medical products company offering products and services in the areas of wound and skin care, ostomy care, continence and critical care and infusion devices. ConvaTec was acquired by Nordic Capital and Avista Capital Partners in 2008 and went public in on October 2016. The company has approximately 8,500 employees and does business in more than 100 countries. ConvaTec ‘s US headquarters are in Skillman, NJ (www.convatec.com).

“The sale of Woodbury to ConvaTec creates an exceptional outcome for both companies’ customers, while also delivering a terrific outcome for our investors,” said Oliver Moses, Senior Managing Director of MTS. “We are proud to have been able to execute on our strategy with Woodbury’s leadership and deliver the business to a new partner who will continue to support the excellent clinical products and customer service that Woodbury provides.”

MTS Health Investors makes equity investments in US-based companies with valuations of $25 million to $300 million that operate within the services sectors of the healthcare industry. MTS manages over $700 million in investments and is currently investing out of its fourth fund. The firm is based in New York (www.mtsinvestors.com).

Robert W. Baird & Co. was the financial advisor to Woodbury Health Products on this transaction.

© 2017 Private Equity Professional | September 11, 2017

Madison Dearborn Completes Buy of Patterson Medical

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Madison Dearborn Partners has completed its acquisition of the medical business of Patterson Companies for approximately $715 million in cash.

Patterson Medical was founded in 1995 as Sammons Preston and was later renamed AbilityOne. The company was acquired by Patterson Companies in 2003.  Today, Patterson Medical is a global specialty distributor of rehabilitation supplies and equipment to acute care facilities, outpatient clinics, and long-term care facilities. The business has approximately 20,000 SKUs of rehabilitation supplies, equipment and assisted living products.

Patterson Medical also has a sports medicine division which operates under the Medco brand name and distributes more than 12,000 SKUs to athletic trainers in professional sports, high school and college teams and recreational sports organizations.  In fiscal 2015, Patterson Medical had total sales of $464 million and EBITDA of $67 million (EBITDA margin of 14.4%). Patterson Medical is headquartered in the Chicago suburb of Warrenville, IL (www.pattersonmedical.com).

The current Patterson Medical management team, including CEO Michael Orscheln will continue in their current positions.  Patterson Medical will retain its name for a transition period but will be rebranded by Madison Dearborn Partners.

“Patterson Medical is a leader in its field and has strong competitive advantages and we are pleased to partner with the company’s exceptional management team,” said Tim Sullivan, a managing director at Madison Dearborn.  “Madison Dearborn has experience investing in health care distribution companies and corporate carve-outs, and we plan to utilize our resources and expertise to support Patterson Medical’s US and international growth.”

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include health care; basic industries; business and government services; consumer; financial and transaction services; and telecom, media and technology services.  Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

Earlier this year, Patterson Companies (NASDAQ:PDCO) retained BofA Merrill Lynch to explore the sale of its medical business.  Patterson will use the proceeds from the sale to reduce the debt it incurred to fund its $1.1 billion acquisition in June 2015 of Animal Health International, a distributor of vaccines and pharmaceuticals, equipment and software used to treat the health needs of companion animals, equine, beef and dairy cattle, poultry and swine.  “The sale of the medical business accomplishes a key component of Patterson’s strategic transformation,” said Scott Anderson, Patterson’s CEO.  “We are now positioned to focus on developing our dental and animal health businesses.”

Madison Dearborn was advised by Barclays and Deutsche Bank and Kirkland & Ellis acted as legal advisor. Deutsche Bank, Barclays, BofA Merrill Lynch and Jefferies provided debt financing to support the acquisition.

BofA Merrill Lynch acted as financial advisor and Briggs and Morgan acted as legal advisor to Patterson Companies.

 © 2015 PEPD • Private Equity’s Leading News Magazine • 8-31-15