Blackstone in Talks to Buy Kinetic (Wall Street Journal)
Blackstone Group is in talks to buy Kinetic Concepts Inc., a wound-care and hospital bed provider, in a deal that could be worth about $5 billion, making it one of the largest leveraged buyouts since the financial crisis, according to a person close to the matter.
It isn’t clear how close Blackstone is to a deal for Kinetic. Kohlberg Kravis Roberts & Co. and other parties also have examined a possible purchase in recent weeks, according to people familiar with the matter, but it’s not clear how close those firms are to any offer. A spokesman for Kinetic declined to comment.
Many private-equity firms have shied away from big acquisitions over the past six months, partly because these firms haven’t been able to compete with deep-pocketed corporations.
But Blackstone is beginning to invest cash from a new buyout fund that recently reached $16 billion, making it one of the largest such funds on record.
The launch of Blackstone’s fund gives it heft to make blockbuster deals, while also putting pressure on the firm to begin investing some of that money.
KKR, along with several partners, spent nearly $4 billion in November of last year to purchase Del Monte Foods Co. Earlier this year, KKR agreed to pay $2.4 billion for a unit of Pfizer.
Shares of Kinetic soared nearly 13% to $66.20 Wednesday in trading on the New York Stock Exchange. Bloomberg News earlier reported the company was in talks with at least two private-equity firms regarding a possible leveraged buyout.
If the value of the deal is $5 billion or more, it would be the third-largest buyout in the U.S. since the financial crisis began in 2007, according to data-tracker Dealogic. At that size, it would be the fifth-largest global deal since that period.
Upheaval in credit markets has made it harder for buyout firms to pull off large deals. But a Kinetic deal could mark a return, as the firms take advantage of recent weakness in shares of some companies.
Write to Gregory Zuckerman at gregory.zuckerman@wsj.com