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Madison Dearborn exits Ikaria

The firm first acquired Ikaria in a 2013 take private

Chicago-based Madison Dearborn Partners has exited its investment in Ikaria, in a transaction valued at approximately $2.3 billion. The firm saw a 2.8x return on the deal, according to sources familiar with the transaction.

Madison Dearborn declined to comment on the deal.

Madison Dearborn first acquired the company through a $1.6 billion take private deal in 2013. At the time, Ikaria also spun off an $80 million research division which is focused on the development of treatments for heart conditions.

Ireland-based Mallinckrodt Pharmaceuticals will acquire Ikaria, to grow its specialty brands segment. The transaction is expected to close in the second quarter of this year.

Ikaria, Inc. is a global critical care company focused on development of treatment for critically ill infants in hospital. New Jersey-based Ikaria is the manufacturer of INOmax, a treatment for infants with hypoxic respiratory failure.

“With this expansion into respiratory neonatal critical care we expect to further broaden our touch points in the hospital market, and at the same time diversify our portfolio with durable assets that play vital roles in the treatment of vulnerable patient populations,” Mark Trudeau, president and CEO of Mallinckrodt said in a statement.

Madison Dearborn is a generalist buyout firm with a significant healthcare vertical. In January, the firm backed the spinout of Walgreens Infusion Services from Walgreen Boots Alliance. Walgreens will maintain a minority interest on the board of the new privately-held entity, which will operate independently providing home and alternate treatment site infusion services throughout the US. That transaction is expected to close in the second quarter of this year.

Madison Dearborn is also currently in market with its seventh buyout fund targeting $4 billion. The firm launched the fund near the end of last year. Madison Dearborn's previous fund closed on $4.1 billion in 2010, according to Private Equity International's research and analytics division.