With the backing of Madison Dearborn Partners, Patterson Medical, a distributor of rehab and sports medicine products, is acquiring Performance Health from Gridiron Capital. The target produces health and self-care supplies.
The deal is expected to close in the summer of 2016 and financial terms were not disclosed. With the transaction, Performance Health will keep its name and Akron, Ohio, headquarters and operate as business segment of Patterson Medical, based in Warrenville, Illinois. The combined company will offer a broad set of rehabilitation, recovery and sports medicine products globally.
Patterson Medical is the self-described world's leading distributor of rehabilitation, sports medicine and assistive patient products for physical and occupational therapy, selling to hospitals, providers of long-term care facilities, clinics and dealers. Performance Health brands include Active Ankle, Biofreeze, TheraBand, Cramer, Bon Vital, TheraPearl, Hygenic and Perform.
Mike Orscheln, Patterson’s CEO, says that manufacturing and distribution in the combined company will continue to operate independently so that the company can continue with its multi-channel sales strategy and offer a broad array of products and growth opportunities for suppliers. Orscheln will continue as CEO, with Marshall Dahneke, chief executive of Performance Health, becoming president of the Performance Health segment.
Madison Dearborn, a Chicago-based private equity firm, has raised funds with more than $21 billion since it launched in 1991. Gridiron, a PE firm in New Canaan, Connecticut, focuses on acquiring and building middle-market manufacturing, service and specialty consumer companies in the U.S. and Canada.
Deutsche Bank Securities Inc. and Citigroup Global Markets are financial advisers to Patterson Medical on the deal, with Kirkland & Ellis LLP as legal adviser. For Performance Health, Credit Suisse is the financial adviser and Ropes & Gray LLP is legal counsel. Deutsche Bank, Barclays and Citigroup Global Markets are leading the debt financing for the deal.
Recent medical products deals have included PE firm Apax Partners buying a majority stake in the respiratory business of Becton, Dickinson and Co., known as BD (NYSE: BDX), in a deal announced in March. Also, in February, medical device company ResMed (NYSE: RMD) agreed to purchase Brightree, a business management and clinical software applications company and Stryker Corp. (NYSE: SYK) announced in February that it is buying Physio-Control International Inc., a medical devices portfolio company of Bain Capital Private Equity.