KKR, Carlyle, EQT, Others in Race to Acquire Healthium

The bidding war, expected to value the company at $750-850 million, marks a significant acquisition opportunity in the medical devices sector.

Top global private equity firms, including EQT (formerly BPEA EQT), KKR, Carlyle, Hillhouse, and TA Associates are competing against each other to acquire Healthium Medtech, the leading surgical sutures and needles manufacturer.

The Apax Partners-promoted Healthium Medtech is also the largest manufacturer of surgical needles globally by volume, making it the fiercest bidding process of the year.

Reportedly, Bain Capital and Advent International are also in the running, heightening competition in this high-stakes deal.

These funds were shortlisted this weekend after the first round of screening based on non-binding bids submitted last weekend. The bidding war, expected to value the company at INR 6300 Cr to INR 6500 Cr, marks a significant acquisition opportunity in the medical devices sector.

The Acquisition Deal

Adding zest to the mix, a consortium of Canada's Ontario Teachers Pension Plan Board, which owns Sahyadri Hospitals, and ChrysCapital, which was also evaluating the deal earlier, has opted to drop out of the race.

Interestingly, Apax Partners initially explored a public listing for the asset but later shifted gears toward a sale process.

Besides EQT, KKR, Bain Capital, and Advent International, General Atlantic is also reportedly eyeing the deal. Earlier reports identified the US private equity firm as a potential suitor, but its participation through a bid submission remains elusive.

Additionally, Sahajanand Medical Technologies, backed by Morgan Stanley PE, and Lotus Surgicals, backed by Murugappa Group and Premji Invest, are some of the other players in the domestic medical devices space.

Apax Partners-owned Healthium, formerly known as Sutures India, ranks as the fourth largest surgical suture manufacturer globally, boasting an approximate 18% market share in India.

With a focus on four primary product areas—wound closure, arthroscopy, wound care, and infection prevention—the company's reach extends to over 40,000 surgeons across 18,000 hospitals, covering 90% of all districts in India.

Since its inception, the company has received multiple investments from PE funds including InvAscent-led India Life Sciences, CX Partners to TPG Growth. Over time, TPG raised its stake to 73% and held a majority in Sutures.

This was Apax’s second investment in the healthcare space in India, following its maiden bet in Apollo Hospitals in 2007. In 2013, Apax exited Apollo Hospitals with a three-fold return.

In December 2022, Healthium sold its UK-based subsidiary Clinisupplies to KKR Health Care Strategic Growth Fund II, for an undisclosed amount.

In FY24, the company had INR 820 Cr in revenue and INR 256 Cr EBITDA while in the next financial year (FY25) it is expected to clock INR 1020 Cr in sales and INR 330 Cr in EBITDA.

So at INR 6500 Cr valuation, the company will be valued at 20 times forward EBITDA.

In August last year, Healthium Medtech introduced a range of TRUMAS sutures meticulously designed to address challenges faced during suturing in minimal access surgeries (MAS).

TRUMAS offers a diverse array of needle and suture combinations, catering comprehensively to the needs of surgeons.

These innovations include anti-reflective needles to alleviate eye fatigue, optimally curved needles for ease of introduction and maneuverability, square body needles for enhanced grip, and well-sized, short-length barb sutures.