Kinetic Concepts, long a devicemaker in transition, is betting big on wound care, signing a deal to acquire Systagenix for $485 million and expand its share of a growing market.
Systagenix markets wound-healing products like foams and contact layers, distributing more than 20 million dressings around the world each month and employing 800 workers, the company said. Systagenix was the wound-care segment of Johnson & Johnson's ($JNJ) Ethicon until One Equity Partners bought it for an undisclosed sum back in 2008.
Under the deal, KCI will hand over $485 million to One Equity in exchange for the wound-care portfolio, and then One Equity will spin out Systagenix's smaller diagnostics business into a company all its own. KCI expects the acquisition to close by the fourth quarter.
The buyout gives KCI a sizable boost in the $3.4 billion global wound-care market, the company said, complementing its existing negative-pressure wound therapy devices.
"The combination of KCI and Systagenix creates a winning platform across the entire wound-care continuum," CEO Joe Woody said in a statement. "It increases our ability to address the complete wound-healing needs of clinicians and their patients with best-in-class outcomes that help to reduce the overall cost of patient care."
Since getting bought by Apax Partners for $6.3 billion in 2011, KCI has slashed hundreds of jobs and shaken up its boardroom on the way to refocusing on wound management. Last year, the company appointed Woody, a Smith & Nephew ($SNN) veteran, and sold off its therapeutic support business to Getinge for $275 million in cash.
The Texas company bought Massachusetts skin-graft outfit MoMelan Technologies for an undisclosed sum in the fall, now deepening its wound-care capabilities with the Systagenix deal.
- read KCI's announcement