TPG's Exactech buy gives it an entry in orthopedics

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TPG Capital has agreed to take Exactech (Nasdaq: EXAC), a distributor of surgical implant devices, private for approximately $625 million. With the purchase of Exactech, the private equity firm plans to “compete with the larger competitors in the orthopedic industry,” according to TPG Capital senior adviser Jeff Binder.

Exactech develops orthopaedic implant devices and biologic materials for hospitals and physicians in the U.S. and internationally. The Gainesville, Florida-based company was founded in 1985 by surgeon Bill Petty, his wife Betty and biomedical engineer Gary Miller with intentions of improving the quality of care for patients with joint injuries or related diseases such as arthritis. Majority of Exactech’s sales are derived from the target’s distribution of extremity implant systems and joint replacement systems for the knee and hip.

TPG Capital, based in San Francisco and Fort Worth, Texas, is the private equity fund of alternative investment firm TPG, which has $73 billion in assets under management. TPG Capital has invested in numerous healthcare companies, including: pharmaceutical services Quintiles IMS, Evolent Health and EnvisionRX; blood transfusion therapy and diagnostics manufacturer Fenwal; orthopedic device company Biomet; and healthcare providers Surgical Care Affiliates, Parkway, and Chindex. TPG has offices in Austin, Beijing, London, New York, Boston, San Francisco and Houston. The transaction for Exactech is expected to close the first quarter of 2018.

Demand for more personalized treatment options, and constant changes in the healthcare sector continue to keep medical device companies busy. Recent deals include: CryoLife's acquisition of German medical device maker Jotec; Vance Street capital LLC’s purchase of the cardiovascular manufacturing tools business from W.L. Gore & Associates Inc.; Arlington Capital-backed Avalign Technologies’ acquisition of medical device distributors Thortex and Millennium Surgical.; Boston Scientific’s (NYSE: BSX) deal to buy heart valve replacement maker Symetis; Teleflex Inc.’s purchase of Vascular Solutions Inc. for $1 billion; and Medtronic plc’s (NYSE: MDT) acquiring of HeartWare International Inc.for nearly $1.1 billion. GTCR also launched a platform company to fund medical device deals.

J.P. Morgan Securities LLC (NYSE: JPM) is acting as the financial adviser to Exactech, while Greenberg Traurig LLP is serving as legal adviser. Ropes & Gray is acting as legal adviser to TPG Capital.

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