Texas lawyers at Jackson Walker bagged a piece of a pretty big deal, the sale of Apax Partners-backed Acelity Inc. and its KCI units to 3M for $6.725 billion, a move that preempts KCI’s planned initial public offering.
Acelity and KCI’s other owners are the Canada Pension Plan Investment Board, known as CPPIB, and Canada’s Public Sector Pension Investment Board, or PSP.
The JW team advising KCI included San Antonio partners Billy McDonough and Jimmy McDonough and associates Alexine Friedman, Noah Speck, Art Cavazos and Ruth Thomson.
Simpson Thacher & Bartlett also counseled Acelity and KCI with lawyers in New York. JP Morgan and Goldman Sachs were their financial advisors.
Cleary Gottlieb Steen & Hamilton represented 3M, which used Credit Suisse as its financial advisor.
The parties expect to close the deal in the second half of the year.
KCI’s general counsel is John T. Bibb, who joined the San Antonio-based company in 2003 after practicing at Baker Botts and Cox Smith Matthews.
JW’s Billy and Jimmy McDonough – who happen to be identical twins – joined the firm in 2017 from Dykema Cox Smith. It’s the third time the McDonough’s have sold KCI/Acelity during their careers.
KCI markets wound care and specialty surgical products in 90 counties. It will become part of 3M’s medical solutions business.
Last month KCI filed for a $100 million IPO with the Securities and Exchange Commission, reporting a $138 million net loss on $1.47 billion in sales last year.
Simpson Thacher & Bartlett was counseling KCI on the issue out of New York while Latham & Watkins lawyers in Washington, D.C. were assisting the underwriters, led by JP Morgan.
Apax, CPPIB and PSP said they’ve worked with Acelity/KCI’s senior leadership team since 2011 to transform the business into a leading global company focused on advanced wound care and specialty surgical solutions.
They targeted acquisitions, such as Systagenix in 2013 and Crawford Healthcare last year. They also sold non-core businesses, such as the LifeCell business unit in 2017 for $2.9 billion and a therapeutic support systems unit in 2012. They’ve also invested in R&D, clinical studies and the expansion of its sales force.
Acelity CEO R. Andrew Eckert said in a statement that the combination of KCI with 3M will accelerate the reach of a business that is a leader in innovation, customer experience and clinical and economic evidence. Apax partner Steven Dyson served as Acelity’s chairman.
Ryan Selwood led the sale from CPPIB while Simon Marc did so from PSP.
Billy McDonough said in an email to The Texas Lawbook that he and his brother have represented the company since the 1990’s, including a going private transaction in 1997 led by Fremont Partners and R.C. Blum & Associates, its subsequent IPO and the sale to the Apax-led consortium in 2011.
They also assisted the company along the way with a variety of financing transactions related to acquisition debt, various recapitalizations and acquisitions and dispositions of business lines, he said.