The private equity owners of ConvaTec are projecting the medical device maker buyout this upcoming year as the approximated $10 billion value strengthens.
The people familiar to the subject matter stated that the possible acquisition is for the purpose of decreasing corporate tax rates. The healthcare sector merger concerning ConvaTec may be the next target of companies based in the United States, especially now that inversion remains rampantly practiced by big companies to move portions of their taxes abroad.
A potential deal with ConvaTec may be carried on by medical equipment manufacturers C.R. Bard Inc. and CareFusion Corp., as well as U.S. maker 3M Co. The people claimed the possible inversion achievement for the two medical tool creators. C.R. Bard currently has $11.2 billion market capitalization, whereas CareFusion has its $9 billion record. Inversion will be obtained by the two if they will utilize their stocks for ConvaTec merger.
ConvaTec wants to augment its value before launching its possible takeover proposal or preliminary public offering on 2015. The people said that ConvaTec is open for reviewing convincing tenders before next year comes.
As the United States law makers pursue obtruding the inversion practices of conglomerates and other businesses, the companies will be urged to make a move while it is possible. If they will miss the chance to move their tax domiciles, it is likely that they will be trammeled in a major tax obligation.
The people reported that ConvaTec targets an EBITDA (earnings before interest, tax, depreciation, and amortization) increase this year by more than $600 million. In 2013, ConvaTec already reported its EBITDA expansion by 15% on a year-on-year basis ($502.5 million).
In 2011, ConvaTec apportions were already acquired by Nordic Capital and Avista Capital Partners from Bristol-Myers Squibb Co. at $4.1 billion. At that time, 3M appears to be a potential runner for the acquirement.
Private deliberations were not met as the people knowledgeable of the matter disapproved getting their identities disclosed. At present, comments from Avista Capital, C.R. Bard, 3M, Nordic Capital, CareFusion, and ConvaTec are yet to be provided.
Inversion deals are apparently taking place this year, which are led by Covidien Plc acquisition by Medtronic Inc., a medical device maker, at $42.9 billion. Merger between Shire Plc. and AbbVie Inc. amounting to $54.7 billion is also part of the inversion movement reports.
ConvaTec is a leading provider of devices for wound therapeutics, ostomy care, infusion, and critical care among others. It currently has 11 manufacturing areas in eight countries, which employ more than 8,000 employees.