EQT cleans up in sale to Madison Dearborn

Fifteen months after acquiring German dental equipment manufacturer Sirona for €418m, the Swedish private equity firm has sold the company to Madison Dearborn in a deal that fetched approximately €800m.

Stockholm-based private equity firm EQT Partners has agreed to sell Sirona Group, a German-based manufacturer of high-tech dental equipment, to fellow private equity firm Madison Dearborn Partners.

Although terms of the transaction were not disclosed, earlier reports indicated that the company’s sticker price could reach more than €700 million ($900 million), a multiple of approximately 10 times Sirona’s EBITDA for the twelve months ended September 30, 2004. Sources close to the transaction, however, indicated that the price of the company was consistently increasing throughout the UBS-led auction process and that the final transaction value was approximately €800 million, almost double what EQT originally paid.

The current transaction represents the second time that Sirona has been sold from one private equity sponsor to another.

In February of this year, one year after EQT first bought the business, the Swedish private equity firm reportedly hired UBS to assist the company in a stock market flotation or potential sale. Other interested bidders in Sirona reportedly included The Blackstone Group.

In a statement, Bjørn Høi Jensen, partner at EQT, noted that the sale to Madison Dearborn, a US private equity firm, would allow the business to grow its market share in the US, the largest dental market in the world.

In another statement, Tim Jenkins, a partner with Madison Dearborn, also noted that his firm was “particularly thrilled about the growth potential of the company.”


Jenkins:  thrilled

The current transaction represents the second time that Sirona has been sold from one private equity sponsor to another. In February 2004, EQT purchased the company for approximately €418 million from Permira, which itself had bought the business out of Siemens in 1997. Permira split the former Siemens unit into two divisions:  Sirona, the manufacturing business, and Demedis, the distribution business, which it sold to Henry Schein last year.

EQT’s investment in Sirona was made from its EQT Northern Europe fund, which closed on €2 billion in March 2001.