Global private equity firm The Carlyle Group has agreed to sell Empi, an orthopedic medical products company, to publicly held Encore Medical for approximately $360 million (€293 million).
According to a statement, Encore Medical will pay $325 million of the deal price in cash. The Austin-based company will issue Carlyle 8 million shares of Encore Medical common stock as well, giving the firm a stake of approximately 12 percent in the company, and making Carlyle the second largest stakeholder in the company, behind New York-based healthcare investor Galen Partners.
Empi is a medical device company focused on products for pain management, orthopedic rehabilitation and physical therapy. The company produces a diverse range of non-invasive medical devices and accessories, primarily used by patients for at-home therapy, and provides physical therapy equipment and supplies to physicians, physical therapists and other healthcare professionals for use in their clinics. For the year ended December 31, 2003, net revenues were $150.5 million.
Encore Medical is a diversified orthopedic company that designs, manufactures, markets and distributes a range of orthopedic devices, sports medicine equipment and related products for the orthopedic industry. The deal will more than double Encore Medical's size and employee count. Encore employs more than 425 people in Austin.
Banc of America Securities served as financial advisor to Encore Medical. JP Morgan Securities served as financial advisor to Empi. The transaction is expected to close in October.
Carlyle’s most significant exit to date was the May sale of Horizon Lines, the largest container shipping company in the US, to New York buyout firm Castle Harlan for $650 million. Carlyle acquired Horizon, formerly known as CSX Lines, in February 2003 from rail freight company CSX Corp. in a recapitalisation transaction worth $300 million.