New developments buffeting wound company acquisition

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New developments buffeting wound company acquisition
New developments buffeting wound company acquisition
Apax Partners' planned $6.3 billion leveraged buyout of wound firm Kinetic Concepts Inc. hit another bump at press time. The latest challenge: a debt crisis in Europe is causing havoc with credit markets.

In July, KCI agreed to the buyout. The London-based acquirer and partners planned to pay for the purchase with approximately $5 billion in debt. The debt was to be backed by Bank of America Corp., Credit Suisse Group AG and Morgan Stanley.

However, KCI has cut a speculative-grade bond offering to $1.65 billion from $2.55 billion, according to Bloomberg News. KCI delayed marketing $900 million in senior unsecured notes because the terms aren't set, Bloomberg reported.

The acquisition would become one of the year's largest private-equity deals, according to analysts. A KCI spokesman said the deal was likely to close this month, following a Oct. 28 shareholders meeting.

San Antonio-based KCI said in July that it had agreed to the Apax acquisition, but with a 40-day “go-shop” period to solicit other offers. That period ended in September.

Most of KCI's revenues are derived from its negative-pressure wound therapy services.

KCI released preliminary third-quarter results at press time, in an apparent effort to help prospective debt financing sources better assess the firm's financial performance. The company reported preliminary earnings of $89 million to $93 million on revenue ranging from $529 million to $533 million for the quarter ended Sept. 30. By comparison, KCI earned $75.8 million on $506.7 million in revenue for the same period a year ago.