KKR nears over $4bn deal to buy medical device maker Integer Holdings
Healthcare company has been targeted by activist hedge fund established by an Elliott Management alumnus
Private equity group KKR is nearing a more than $4bn take-private deal for a medical device maker recently targeted by an activist hedge fund set up by an Elliott Management alumnus.
KKR was in late-stage talks to buy Integer Holdings, valuing the group at between $125-$130 a share, or as much as $4.4bn, according to people familiar with the matter. A deal could come as soon as Monday but was yet to be formally agreed, they said.
The take-private deal would mark a triumph for Irenic Capital Management, an activist hedge fund set up by former Elliott Management portfolio manager Adam Katz, which built a 3 per cent stake in Integer earlier this year and pushed for a sale.
Integer agreed to add two directors to its board in a brokered peace with Irenic in March and a month later launched a strategic review to evaluate a range of options, including a sale. Other bidders circled Integer as part of the sale process, the people added.
Founded in 2021 by Katz and Indaba Capital alumnus Andy Dodge, Irenic has rapidly grown to $2.4bn of assets under management. It has made a name for itself by successfully agitating for take-private sales of ailing public companies including Wagamama owner The Restaurant Group and industrials company Barnes Group.
Integer, an outsourcer which manufactures devices including cardiac pacemakers and diabetes monitoring equipment on behalf of medical technology companies, is one of several companies in the sector that have struggled lately.
Shares in Integer plummeted by almost one-third in a single day last October after it slashed earnings projections. This kicked off a six-day losing streak, during which the stock shed 42 per cent and the company’s valuation fell to about $2bn. But the shares have roughly doubled since then.
Integer’s shares closed 20.2 per cent higher on Friday at a 13-month high of $121.21 following reports that a take-private deal was near. KKR declined to comment. Integer did not respond to a request for comment.
The potential deal comes amid an uptick in healthcare dealmaking. Earlier this year medical device maker Masimo agreed a $9.9bn deal to sell to Danaher and life sciences group Bio-Techne sold to Germany’s Merck KGaA in an $11.3bn deal.