KKR will take Integer Holdings private in an all-cash US$5.7bn deal, expanding its healthcare portfolio with the medical device supplier.
Shares in the Plano, Texas-based company rose 2.6 per cent in early trading.
Integer makes components and finished products used by medical device companies in cardiovascular and neuromodulation therapies, among other applications.
Neuromodulation uses electrical or chemical signals to alter nerve activity, often to manage pain or neurological conditions.
Brett Fishbin, an analyst at KeyBanc Capital Markets, told Reuters the Integer acquisition was positive for the medtech sector because it showed private equity firms were ‘realising the value of public companies with strong track records.
He said this was happening despite ‘transitory headwinds.’
These are temporary challenges that can affect a company’s performance or share price.
KKR reported US$796bn in assets under management at the end of the second quarter.
The buyout will increase its healthcare exposure and rank among its largest deals in the sector since its US$9.9bn take-private acquisition of Envision Healthcare in 2018.
Under the terms announced on Monday, KKR will pay US$127 per share in cash, a 4.78 per cent premium to Integer’s closing price on Friday.
The transaction also includes the assumption of Integer’s outstanding debt.
Integer has previously faced pressure from activist investors, which buy stakes in companies and seek changes to their management or strategy.
In March, the company agreed with Irenic Capital Management, one of its largest shareholders, to appoint two directors to its board.
Irenic owns a stake of more than 3 per cent in Integer, according to LSEG data.
The deal is expected to close by the end of the year.
