A peek into the private equity mind


It's all over the news today that Kinetic Concepts, Inc. (KCI) has agreed to be acquired by a private equity firm called Apax Partners and two Canadian pension funds in a $5 billion buyout. KCI, as you know, is a manufacturer and provider of wound care therapy products.

A blogger for Forbes.com was able to get an interview with Buddy Gumina, co-head of Apax's healthcare practice. Gumina's not exactly forthcoming, but he does say a few things that give us a peek into how private equity views the healthcare industry right now, including:

How we thought about the business is that you have some attractive macro trends, including an aging demographic and increasing need for healthcare solutions that increase quality and reduce costs. And then there are other attractions, like the product portfolio.

The aging demographic and the increasing need for healthcare solutions that increase quality and reduce costs have everything to do with home medical equipment, in general. Not just KCI.

This may help to explain the results of our most recent NewsPoll: Just over half of the 146 respondents to the poll (56%) said they have been approached by a buyer to acquire their company. Managing Editor Theresa Flaherty writes:

It may seem hard to believe, but despite all the crises in the industry, there are buyers out there looking to acquire HME companies, according to a recent HME NewsPoll.

Check out Monday's HME NewsWire to read the rest of Theresa's story, including information on who's looking to buy: local competitors; companies outside of their local market; or companies outside of the industry?

In hindsight, we should have also asked respondents to the poll whether they were agreeable to being acquired.

If I'm KCI, apparently the answer is yes.

Liz Beaulieu