KKR To Buy Indian Medical Devices Maker Healthium Medtech for $840 Mn

KKR (Kohlberg Kravis Roberts & Co.), a global investment firm, is set to acquire Healthium Medtech (formerly known as Sutures India) from its current private equity owners, Apax Partners, for an impressive ₹7,000 crore (approximately $840 million) in enterprise value.

Healthium Medtech is an Indian company based in Bengaluru. It specializes in manufacturing medical devices, particularly surgical products. Notably, it is the largest manufacturer of surgical needles globally by volume.

This acquisition follows a competitive bidding process that also involved a consortium of Mankind Pharma - ChrysCapital and Novo Holdings, the controlling shareholders of Danish drug major Novo Nordisk.

Earlier this year, Apax had initiated a formal sale process, and KKR emerged as the highest bidder for Healthium. Notably, in 2022, Healthium Medtech had already sold its UK- based subsidiary to KKR for an undisclosed amount. The transaction is being done at 20X the current EBITDA multiple of the current fiscal year, indicating the significant value of the deal. 

Healthium Medtech's revenue for the financial year 2023- 24 was ₹820 crore, with an EBITDA of ₹256 crore. For the current financial year, revenue is expected to reach ₹1,020 crore, with EBITDA around ₹350 crore.

Healthium Medtech was originally established in 1992 in Bengaluru by LG Chandrasekhar and S Subramanium, former executives with Smith & Nephew and Johnson & Johnson.

Earlier in 2022, Healthium Medtech had sold its UK-based subsidiary to KKR for an undisclosed amount.

Market Landscape

Healthium holds about 18% market share in India and is the fourth-largest surgical suture manufacturer in the world. Under KKR ownership, Anish Bafna, the current CEO and MD of Healthium Medtech, will continue to lead the company.

Ethicon Inc., a subsidiary of Johnson & Johnson, currently holds the market leadership position in surgical sutures. Other players in the global surgical sutures market include Arthrex Inc and Covidien Holding Inc.

This acquisition reflects KKR's strategic move to strengthen its presence in the healthcare sector, particularly in the medical devices industry. Healthium Medtech's expertise and market position make it an attractive investment for KKR.

Recent Acquisitions by KKR

KKR has been quite active in the acquisition space. Here are some of their recent acquisitions:

• SunFire (May 2024): KKR acquired SunFire, a company operating in the distribution sector.
• Avantus (April 2024): KKR made an acquisition of Avantus, which likely falls within the enterprise software domain
• mdf commerce (April 2024): KKR's acquisition of mdf commerce further expands its portfolio. mdf commerce is likely involved in technology or e-commerce.

These acquisitions demonstrate KKR's strategic moves to diversify its investment portfolio across various sectors. Keep in mind that KKR's investment landscape is dynamic, and they may continue to explore new opportunities in the market.

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