KCI absorbs two acquisitions into wound care mega-company

Texas devicemaker Kinetic Concepts will reinvent itself as a mega-company focused on wound care, biologics and regenerative medicine by more closely absorbing into its corporate structure an old acquisition along with a new one. The move continues a multi-year push to reorganize and revamp.

KCI's first step will be to operate as a single entity with LifeCell, a New Jersey regenerative medicine outfit it agreed to buy in 2008 for $1.7 billion. Until now, it has operated as a separate entity. In July, Kinetic Concepts said it would snatch up wound healing company Systagenix for $485 million. The ex J&J ($JNJ) unit will similarly be absorbed once the deal closes in the 2013 fourth quarter. KCI, of course, focuses on negative pressure wound healing technologies and forms lots of synergies with the two other companies as a result.

KCI President and CEO Joe Woody will run the recast company. A spokesman told FierceMedicalDevices that the combined entity will keep the KCI name "for now," while it does "due diligence."

Now that the KCI board has approved its new corporate structure, the company is betting the combined enterprise will give it strength in size, improving relationships with customers and boosting cross-selling opportunities. KCI is trying to gain a dominant position in the $3.4 billion global wound-care market.

The newly-enhanced KCI will generate over $2 billion in revenue, the company said. It will compete with larger rivals including Smith & Nephew ($SNN), which has deepened its wound-care focus in recent months.

It's been a long road for KCI since Apax Partners bought the company for $6.3 billion in 2011. KCI has bet its future on wound management and has eliminated hundreds of jobs and brought in new leadership to execute its new strategy. Among the big changes: the selloff of its therapeutic support business to Getinge for $275 million in cash. Woody, a Smith & Nephew veteran, came in to run KCI beginning in 2012.

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