CDR investing big with Drive DeVilbiss

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As expected, Clayton, Dubilier & Rice announced in August that it would make a significant equity investment alongside existing management in Drive DeVilbiss Healthcare. Terms of the transaction, which is expected to close in the fourth quarter, were not disclosed.

On August 10, Reuters published an article indicating Drive DeVilbiss might be sold for $750 million The company sent a letter saying it was refinancing its credit to continue growth.

In its response, the company said it had partnered in 2008 with private equity firm Ferrer Freeman & Company and wanted to expand further.

Today, “given the Company's position within the healthcare industry, its prospects, multiple channels of growth and acquisition strategy, the management team has decided to pursue a partnership with a larger private equity firm to replace Ferrer Freeman and provide the Company with significant capital to continue its growth strategy.”

Drive has completed 25 acquisitions since 2002 to expand its portfolio, most notably buying respiratory company DeVilbiss Healthcare in July 2015. Drive DeVilbiss has more than 15,000 dealers and has mobility, respiratory, bath, bed and other products that are popular in long-term care and home healthcare. 

“We believe Drive has substantial runway for continued organic growth, given the company's strong value proposition, partnership approach with its customers and significant product breadth. Drive also has a strong pipeline of acquisitions, which should result in continued robust growth in the years ahead,” said Derek Strum, CD&R Principal.

Drive was founded in 2000.

CD&R obtained committed financing from Barclays, JPMorgan Chase Bank N.A., Citigroup Global Markets Inc., Capital One, National Association and HSBC Securities (USA) Inc.