| NEW YORK
NEW YORK Aug 18 ConvaTec's private equity
owners plan to explore a sale of the medical device maker next
year, even as interest from several healthcare companies in a
potential $10 billion acquisition intensifies, according to
people familiar with the matter.
Amid a wave of mergers in the healthcare sector aimed at
reducing corporate tax rates, Luxembourg-based ConvaTec has
emerged as a target for U.S. companies looking to move their tax
domiciles abroad in a practice known as inversion.
Diversified U.S. manufacturer 3M Co and medical
equipment makers CareFusion Corp and C.R. Bard Inc
are among the companies exploring a potential deal for
ConvaTec, the people said.
CareFusion, with a market capitalization of $9 billion, and
C.R. Bard, with $11.2 billion, would both be able to achieve an
inversion if they use their own stock to pay for ConvaTec.
While ConvaTec would review any compelling offer that would
come before 2015, the company for now wants to boost its value
further before launching an auction or an initial public
offering next year, the people said.
Still, calls from some U.S. politicians to crack down on
inversions could prompt a potential buyer to act sooner rather
than later, for fear missing the window of opportunity, one of
the people added.
ConvaTec reported earnings before interest, tax,
depreciation and amortization (EBITDA) of $502.5 million in
2013, up 15 percent year-on-year. It is hoping to exceed $600
million in EBITDA this year, the people said.
The people asked not to be identified discussing private
deliberations. ConvaTec, Avista Capital, Nordic Capital, 3M,
CareFusion and C.R. Bard could not be reached for comment.
ConvaTec makes wound care and ostomy care products at 11
manufacturing sites in eight countries, and sells them in more
than 100 countries. It is scheduled to report its second-quarter
earnings on Tuesday.
Private equity firms Avista Capital Partners and Nordic
Capital acquired ConvaTec from Bristol-Myers Squibb Co
in 2011 for $4.1 billion. 3M was one of the contenders for
ConvaTec at the time, according to people familiar with the
Inversion deals so far this year include medical device
maker Medtronic Inc's acquisition of peer Covidien Plc
for $42.9 billion, and drugmaker AbbVie Inc's
$54.7 billion merger with pharmaceutical company Shire Plc
(Reporting by Olivia Oran, Soyoung Kim and Greg Roumeliotis in
New York; Editing by Tom Brown)