ConvaTec, maker of wound, ostomy and skin care products is exploring a sale of itself for as much as $10 billion with investment banks Morgan Stanley and Goldman Sachs.
An initial public offering is also possible for the Luxembourg-based device company in 2015, Reuters reports. But the recent volatility in the stock market could chill those plans.
Reuters says that potential suitors include 3M, and reported in August that C.R. Bard ($BCR) and CareFusion ($CFN) were interested. The latter company just announced a takeover by Becton Dickinson ($BDX) for $12.2 billion in this year of med tech merger mania.
The company had earnings before interest, taxes, depreciation and amortization (EBITDA) of $549.6 million in 2013. ConvaTec says it sells its products in more than 100 countries, and has 11 manufacturing sites in 8 countries.
Private equity firms Avista Capital Partners and Nordic Capital purchased ConvaTec from Bristol-Myers Squibb ($BMY) in 2011 for $4.1 billion.
According to Reuters, the potential bidders are not motivated by the prospect of a tax inversion. That tax lowering strategy has partly fueled this year's med tech merger mania. Another reason for the mergers is the need to gain leverage with rapidly consolidating hospitals in price negotiations.
According to Evaluate MedTech, industry deal values rose 363% in the first half of 2014 to $30 billion, with megadeals still pending, such as Medtronic's $43 billion takeover of Covidien ($COV).
- read the Reuters story