Kohlberg Kravis Roberts and Bain Capital have completed a $1.27 billion purchase of Accellent, buying the company from a team of Denver-based KRG Capital and DLJ Merchant Banking Partners. KKR originally locked up the deal in mid-October, but brought Bain in after it had already won the auction for the medical device manufacturer.
According to a source close to the transaction, KKR led the deal and maintains a 71 percent stake in the business. Bain controls a 24 percent piece of Accellent, and management rolled over a 5 percent holding.
Accellent is based in Wilmington, Massachusetts. It provides contract manufacturing and design services to medical device makers in the cardiology, endoscopy and orthopaedic markets. According to a KRG press release, the company logged approximately $100 million in pro forma EBITDA for the 12 months trailing September 30, on sales of $472 million.
For KRG and DLJ, the sale represents a profitable exit for the pair. KRG formed Accellent (formerly UTI Corp.) in 1999, when it reportedly invested $80 million in the rollup of four medical device companies. After more companies were added onto the platform, DLJ was brought in last year to help fund another add-on, the $230 million acquisition of MedSource Technologies, which included a $89 million equity investment from DLJ. The company has since added two other acquisitions.
In a statement, KRG indicated that the sale yielded a 3x return on its original equity investment in Accellent.
Credit Suisse First Boston ran the auction for the sellers, while law firm Hogan & Hartson provided legal advice. KKR was advised by JP Morgan on the financial side and Simpson Thacher & Bartlett provided counsel.