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Report: San Antonio’s Acelity may go public again
December 11, 2018

Acelity, the San Antonio wound-care company, may be going public again, according to a report by Bloomberg. Pictured is the company’s headquarters. Photo: Acelity

Patrick Danner, Staff Writer, San Antonio Express-News

San Antonio wound-care company Acelity, formerly known as Kinetic Concepts Inc., could be making a return to the public markets.

London-based private equity firm Apax Partners, which led a group that bought Acelity in 2011, is considering an initial public offering for Acelity as soon as the first half of next year, Bloomberg reported Tuesday, citing people with knowledge of the matter.

Apax has begun speaking with advisers about a potential listing, the people said, according to Bloomberg. An IPO could give Acelity a valuation of $5 billion, although no final decisions have been made, noted the sources, who didn’t want to be identified because they weren’t authorized to speak publicly.

“While we always are reviewing the strategic options available to our company, our policy is no tot comment on such matters,” Acelity spokeswoman Maggie Fairchild said in an email to the San Antonio Express-News.

Acelity is known for its negative-pressure wound therapy, used in wound healing and surgical management.

The Apax-led group paid more than $6 billion in a leveraged buyout for what was then known as KCI. KCI’s corporate name was changed to Acelity in 2014.

In the summer of 2015, paperwork was filed with the Securities and Exchange Commission to take Acelity public again. Acelity later disclosed it was seeking to raise $1 billion.

However, in December 2016, Acelity decided to shelve the IPO “in light of current public market conditions,” an SEC filing said.

“The IPO market in the U.S. has been challenging over the past year and the SEC asked us to withdraw our IPO registration statement as an administrative matter,” Acelity’s former CEO Joseph Woody said at the time. “We will continue to evaluate opportunities to approach the IPO market as it evolves.”

Woody was abruptly replaced not long after Acelity dropped its IPO plans, replaced by longtime health-care technology executive R. Andrew Eckert.

Eckert, in an interview last year, was asked whether Acelity would be around in five years.

“Acelity will be around, for sure,” he replied. “Whether it’s an independent company or not, I don’t know. But it will certainly be around. I can guarantee one thing: No one will ever buy this company with the intent of dismantling it.”

KCI was founded by Dr. James Leininger in 1976 as a specialized medical-bed maker. It came perilously close to filing for bankruptcy, but was saved by two investors.

In 1988, KCI raised $50 million in its first IPO. It was a big payday for employees who received stock options.

“Our parking lot went from a bunch of old beat-up pickup trucks to new Mercedes, new BMWs,” Leininger said in 2015.

KCI went private again in 1997. Seven years later, it went public in a $540 million offering.

In 2008, KCI announced its largest acquisition — $1.7 billion deal for LifeCell Corp., a biomedical company specializing in regenerative medicine. LifeCell was sold to pharmaceutical giant Allergan for $2.9 billion in 2016.

Before the sale of LifeCell, Acelity’s annual revenue approached $2 billion.

Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | pdanner@express-news.net | Twitter: @AlamoPD

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