Bad things happen to private equity-owned companies that do not achieve an "exit" for their investors. For instance, Luxembourg's wound care player ConvaTec will begin closing its Greensboro, NC, manufacturing facility in July, resulting in 250 layoffs, North Carolina's job loss database shows.
The first round of "separations" will occur in July, and the last round will be completed during the first quarter of 2017. But non-manufacturing employees in Greensboro will not be affected, such as those who work in the Global QARAC headquarters, also located in the city, a letter to the North Carolina Department of Commerce says.
Private equity owners Avista Capital Partners and Nordic Capital were reported to be seeking a corporate suitor or IPO for the company, but have not succeeded in achieving either goal. The duo purchased the wound care unit from Bristol-Myers Squibb ($BMY) for $4.1 billion in 2008.
That year, which featured a bevy of dealmaking in the life sciences sector, Reuters reported that Kimberly-Clark ($KMB), which has since spun off its medical equipment unit; 3M ($MMM); CareFusion, now owned by Becton Dickinson ($BDX); and C.R. Bard ($BCR), which could use the company to launch a tax-saving corporate inversion, were interested in acquiring ConvaTec. Plans for an IPO in 2015 were never realized either.
Also in 2014, ConvaTec announced that it will shutter its Skillman, NJ, office and lay off 118 employees from its sales, marketing and human resources division.
According to its Q3 2015 annual report, the company posted a net loss of $184.8 million in the first nine months of 2015. Wound therapeutics and ostomy care devices were responsible for $268 million of its $412 million in quarterly net sales, with continence & critical care, and infusion devices responsible for the remainder.