The Southwood Group has been closely monitoring Biomet Group Inc, the maker of orthopedic medical devices and as the one of the world’s leading medical device manufacturers considers IPO in a possible $100 million offering.
Hong Kong., March 12, 2014 - (PressReleasePoint) -
Biomet Group Inc, a closely held maker of orthopedic medical devices based in Warsaw Indiana controlled by shareholders including TPG Capital, Goldman Sachs Group Inc and the Blackstone Group LP, has filed with regulators to sell shares in a United States IPO listing with plans to see the monies raised from the offering being used to pay down debt. Biomet had revenues in excess of $3 billion for its latest fiscal year, according to the fillings made on behalf of its planed IPO.
The company’s filling for IPO also stated that the proceeds raised from the share sale will be going towards paying of accumulated debt, which last year was 5.2 times earnings before taxes, interest, depreciation and amortisation, compared with an average of only 0.7 times for that of its larger peers including Stryker Corp, Zimmer Holdings Inc and Smith & Nephew Plc, Biomet’s reported net income for the six months ending on November 30 was $36 million, compared to a net loss of $97.7 million for the same period a year earlier with the orthopedics device supplier carrying a total debt level of $5.9 billion.
“Biomet as it is now to be known represents a fairly substantial investment prospect at a rather reasonable valuation. The company is by no means the largest in the field in the U.S but this shows a depth for potential future expansion, though one cannot rule out a takeover bid either ahead of or within 12 months of the company’s listing, the most likely candidate for this being Stryker Corp, who have already demonstrated their willingness to practice growth by acquisition as with Mako last year,” stated Franz Kroeger, Global Market Strategist at The Southwood Group.
The medical device manufacturer which specialises in orthopedic implants was previously traded publicly until its acquisition by a group of private equity firms in 2007 operating under the name of LVB Acquisition Inc, the filling for the initial public offering has given instruction that the name will be changed to Biomet Group Inc prior to the completion of listing. JP Morgan Chase & Co, Bank of America Corp, Citigroup Inc are listed as managing the listing having applied for the company to trade under BMET.
“At the moment Biomet represents a significant and well priced IPO for those seeking to diversify or expand into medical field investments without the inherent risks associated with the pharmaceuticals sector though still attracting the possibility of takeover driven valuation increases, we will be following the forthcoming progress of this company as it nears listing and advising our clients accordingly as to the best positions to be held,” concluded Franz Kroeger, Global Market Strategist at The Southwood Group.
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