KCI in Full Growth Mode with Systagenix Acquisition

Kinetic Concepts, Inc.(KCI) is to acquire UK-based Systagenix, an established provider of advanced wound care (AWC) products, for a purchase price of $485 million. KCI sees the move augmenting its global position as a leading wound care company, further broadening its diverse product portfolio. Subject to the usual closing conditions the transaction is expected to complete in the fourth quarter of 2013.

Background

What’s in this for KCI? Well, the company news release plays heavily on the idea the Systagenix acquisition represents a major step in its strategy towards increased revenue diversification and geographic expansion. It claims the transaction provides increased access to the $3.4 billion AWC market, which has an overall category growth of 3 to 5 percent. Systagenix has a meaningful presence in the AWC market and is the market leader in collagen dressings. Then there’s the usual aspirational assertion that KCI’s market presence will leverage Systagenix’s strength in the growing categories of foam and contact layers. Many of Systagenix’ products are complementary, and are often used before, during and after use of KCI’s core negative pressure wound therapy (NPWT) products. Overall, it’s a compelling argument, coming as it does on the heels of KCI’s recent successful acquisition of the CelluTome™ System epigrafting technology.

Systagenix, anyone who’s driven past the factory would know, sprang out of Johnson and Johnson a number of years ago. It possesses a broad portfolio of innovative AWC products with a focus on moist wound healing dressings – including PROMOGRAN PRISMA®, the collagen dressing market leader, TIELLE® (foam) and ADAPTIC® (non adherent contact layers).

Company comments

for KCI

“The acquisition of Systagenix advances our strategy and vision as the global leader in transformational healing solutions. This major strategic investment will diversify KCI’s global portfolio of wound care products and reinforces our competitive advantage as the trusted gold standard in wound healing,” said Joe Woody, president and CEO, KCI. “The combination of KCI and Systagenix creates a winning platform across the entire wound care continuum. It increases our ability to address the complete wound healing needs of clinicians and their patients with best-in-class outcomes that help to reduce the overall cost of patient care.”

for Systagenix

“This is a unique and exciting opportunity to bring together two leaders in the wound care field who share a common commitment to innovation and improving patient outcomes,” said Ernest Waaser, CEO, Systagenix. “The strong clinical capabilities, geographic presence, complementary products and established infrastructure of KCI will further expand the long-term growth potential for Systagenix. We are delighted to join KCI and believe this combination will provide significant benefits to employees, customers and most importantly, the patients we serve around the world.”

Source: Kinetic Concepts, Inc.