KKR has reached an agreement to buy Integer Holdings, the Plano, Texas-based maker of components and finished products used by medical-device companies, in an all-cash deal valued at roughly $5.7 billion. The transaction, announced on Monday, will take Integer private and broaden KKR's presence in the healthcare sector.
Under the terms set out by the parties, KKR will pay $127 per share in cash for Integer, a price that represents a 4.78% premium to the company’s closing share price on the prior Friday. The arrangement also provides for KKR to assume Integer’s outstanding debt as part of the purchase consideration.
Shares of Integer rose 2.6% in early trading following the disclosure of the agreement. The company supplies parts and assembled products that are used in cardiovascular therapies, neuromodulation treatments and other medical applications, positioning it as a strategic supplier to makers of medical devices.
The transaction comes as private-equity firms continue to pursue assets in the health-care space. The announcement cited recent notable buyouts, including American Industrial Partners’ $1.27 billion acquisition of Avanos Medical and Blackstone and TPG’s acquisition of Hologic for $18.3 billion, underscoring sustained buyer interest in the sector.
KeyBanc Capital Markets analyst Brett Fishbin described the deal as a positive signal for the medtech industry, saying it illustrated private-equity firms were recognizing value in public companies with solid track records despite what he called transitory headwinds that have pressured stock prices. Fishbin suggested Integer could serve as a platform vehicle for KKR, allowing the firm to add smaller assets and integrate them into Integer’s operational footprint.
For KKR, the purchase will expand its healthcare holdings and will be among its larger transactions in the sector. The firm reported $796 billion in assets under management at the end of the second quarter, and the Integer buyout will rank alongside some of its more significant healthcare deals since its $9.9 billion take-private of Envision Healthcare in 2018.
Integer has previously faced pressure from activist investors. In March, the company reached an agreement with Irenic Capital Management, one of Integer’s largest shareholders, to add two directors to the board. According to LSEG data, Irenic holds a stake of more than 3% in Integer.
Integer said the transaction with KKR is expected to be completed by the end of the year. The deal is structured as an all-cash purchase that includes the assumption of existing debt, and will privatize the company after closing.
Markets and sectors affected: The deal touches the medtech manufacturing supply chain, private equity investment activity in health care, and capital markets for medical-device companies.