KKR buys Healthium Medtech from Apax Partners

Global investment firm KKR on Monday announced the acquisition of medical devices company Healthium Medtech Ltd, earlier known as Sutures India, from an affiliate of funds advised by private equity advisory firm Apax Partners.

The acquisition will be made by a special-purpose vehicle owned by KKR-managed funds, Asian Fund IV, which will acquire a controlling interest in the Healthium group, including Healthium.

Though the companies did not reveal the total value of the transaction, some reports suggest it's estimated at around ₹7,000 crore. A global news agency cited the deal value at $838.60 million (₹7,000 crore).

Healthium's acquisition into the KKR fold comes following competition from a consortium of Mankind Pharma and ChrysCapital, which was also eying the controlling stake in the company. The Apax Funds acquired Healthium in 2018 and owned a 99% stake, while 1% was held by Anish Bafna, Chief Executive Officer and Managing Director, Healthium.

Healthium focuses on products used in surgical, post-surgical and chronic care across 90 countries.

A statement says since the acquisition by Apax Funds in 2018, the company strengthened its existing portfolio of wound closure devices and consumables and invested in new franchises such as arthroscopy and advanced wound care through in-house R&D and M&A. "During this period, Healthium expanded its presence from 50 countries to more than 90 today."

As per Bafna, KKR brings in deep global healthcare expertise and knowledge of the Indian market. "We look forward to our next phase of growth with their support, being able to leverage their global platform, as well as strong investment and operational expertise.”

KKR head of India Private Equity Akshay Tanna says Healthium has a strong track record of "delivering quality products" and has a wide distribution network both in India and globally. Apax partner Steven Dyson says the company saw the opportunity to leverage Healthium’s “strong existing portfolio” to create a global diversified MedTech platform.

Apart from Healthium, KKR’s other recent investments in the healthcare sector in India and the Asia Pacific are JB, a branded formulations pharmaceutical company, hospital network Max Healthcare; pure-play generic injectable pharmaceutical products company Gland Pharma; PHC, a medical equipment and clinical healthcare IT systems in Japan; and the Philippines' private hospital chain Metro Pacific Hospitals, among others.

Healthium's consolidated revenue (excluding the discontinued UK business) surged 14.3% to ₹728.5 crore in FY2023 from ₹637.1 crore in FY2022, primarily on volume growth on the back of strong distribution network in the domestic markets, new product launches and established relationships with existing clients. Its revenue in H1 FY2024 was ₹393.4 crore. The company's PAT came in at ₹68.9 crore in H1 FY24, while it stood at ₹ 603.2 crore in FY23, including a gain of ₹490.3 crore from the sale of UK business and ₹79.3 crore in FY22.

The transaction is subject to receipt of certain regulatory approvals and is expected to close in the third quarter of 2024. Apax Partners and Healthium were advised by Jefferies LLC as financial advisor and Kirkland & Ellis LLP as legal counsel. KKR was advised by Moelis & Company as financial advisor and Simpson Thacher & Bartlett and AZB & Partners as legal counsel.