KKR to take Integer Holdings private in $5.7bn all-cash deal

KKR (KKR) has agreed to acquire medical-device manufacturer Integer Holdings (ITGR) in an all-cash transaction valued at approximately $5.7bn, adding a critical supplier to the medtech industry to its expanding healthcare portfolio.

Under the terms of the deal, KKR will pay $127 per share — a premium of roughly 4.78 per cent to Integer's closing price on Friday — and assume the company's outstanding debt.

Integer produces components and finished products used in cardiovascular and neuromodulation therapies, supplying cardiac and pain-management devices to major medical-equipment manufacturers. For KKR, which reported $796bn in assets under management at the end of the second quarter, the buyout will rank among its largest healthcare transactions since its $9.9bn take-private of Envision Healthcare in 2018.

Brett Fishbin, an analyst at KeyBanc Capital Markets, described the deal as a positive signal for the medtech sector, saying private equity firms were "realizing the value of public companies with strong track records" despite what he characterized as transitory headwinds that have weighed on valuations. Fishbin added that Integer could serve as a platform for KKR to acquire additional smaller assets and fold them into existing operations.

The acquisition comes amid sustained private-equity appetite for healthcare assets. Recent deals in the sector include American Industrial Partners' $1.27bn acquisition of Avanos Medical and a $18.3bn deal by Blackstone (BX) and TPG (TPG) for women's health diagnostics company Hologic.

Integer has previously contended with activist investor pressure. In March, the company reached a board agreement with Irenic Capital Management, one of its largest shareholders, which holds a stake of more than 3 per cent in the company, following a push by Irenic to appoint two directors.

The transaction is expected to close by the end of the year.