KKR acquires Healthium from Apax Partners for Rs 7,000 cr

Mumbai: KKR on Monday announced the acquisition of Healthium Medtech Ltd. (formerly Sutures India) a leading Indian medical devices company, from its current PE owner Apax Partners for an undisclosed sum. However, sources aware of the transaction said KKR valued the company at Rs 7000 crore, inclusive of its debt.

The acquisition will be made by a special purpose vehicle owned by KKR-managed funds which will acquire a controlling interest in Healthium group, including Healthium

KKR trumped a consortium of Mankind Pharma and ChrysCapital in the final stages of this competitive auction process. Other contenders Novo Holdings, the controlling shareholder in Danish drug major Novo Nordisk and EQT did not eventually bid, ET reported on Saturday.

Apax owned 99.8% of the company, with the rest held by Anish Bafna, chief executive and managing director of Healthium Medtech. It is the fourth-largest surgical suture manufacturer in the world, with a market share of about 18% in India. Bafna will continue to run the company under KKR, said people cited above.


“Healthium has established itself as a leading homegrown producer of medical devices with a strong track record of delivering quality products and a wide distribution network both in India and globally. We look forward to leveraging our global network and healthcare expertise to accelerate its growth in this fast-growing sector and further scale its global business through organic and inorganic growth strategies,” said Akshay Tanna Head of India Private Equity at KKR.

Interestingly, Healthium sold its UK-based subsidiary Clinisupplies also to KKR Health Care Strategic Growth Fund II in 2022 for an undisclosed amount.

KKR makes its investment from its Asian Fund IV. A strong backer of healthcare sector India and Asia Pacific, in the past the buyout fund has acquired JB, a leading branded formulations pharmaceutical company in India; Max Healthcare, one of India’s largest hospital networks; Gland Pharma, a leading Indian pure-play generic injectable pharmaceutical products company. Across Asia, KKR’s healthcare portfolio includes PHC, a leading provider of medical equipment and clinical healthcare IT systems in Japan; Bushu Pharma, a leading pure-play contract development and manufacturing company also in Japan; and Metro Pacific Hospitals, the largest private hospital chain in the Philippines. Moelis advised KKR in the transaction.

The transaction is subject to receipt of certain regulatory approvals and is expected to close in the third quarter of 2024.

Sutures India was set up in 1992 in Bengaluru by LG Chandrasekhar and S Subramanium, former executives at Smith & Nephew and Johnson & Johnson.

The Healthium Group has five key product areas — advanced surgery, arthroscopy, urology, wound care and consumables. It’s the largest manufacturer of surgical needles globally by volume. Healthium says its coverage amounts to over 40,000 surgeons in 18,000 hospitals, reaching 90% of all districts in India. It also exports to

90 countries currently across Europe, South America, Africa and Asia from 50 previously. The overseas revenue accounted for 45% of the FY23 total, while the rest came from the domestic market. It has an in-house development team, along with a strong sales and distribution channel, said a Icra report in January.

In FY24, the company posted Rs 820 crore in revenue and Rs 256 crore ebitda. This financial year, revenue is expected to reach Rs 1,020 crore with ebitda at around Rs 350 crore. The KKR transaction is pegged at 20x the EBITDA multiple, said people in the know.

In August 2021, the company bought the gelatin sponge business of Sri Gopal Krishna Labs on a slump sale basis. It later also acquired CareNow Medical, which is engaged in the design, manufacture, marketing and sale of advanced wound management and infection prevention products.

“Thanks to our long experience partnering with medical devices companies, we saw the opportunity to leverage Healthium’s strong existing portfolio to create a global diversified MedTech platform,” said Steven Dyson, Partner at Apax.

“Our products are now used in one-in-five surgeries globally and we have nearly doubled the markets we’re present in,” added Anish Bafna, Chief Executive Officer of Healthium.

Johnson & Johnson’s Ethicon is the global leader of the segment. Others in the global surgical sutures market include Arthrex Inc and Covidien Holding Inc.

Apax had initiated the formal sale process earlier this year, mandating investment bank Jefferies to handle it, valuing Healthium at Rs 6,500-7,000 crore, ET first reported in January. Two dozen contenders — including Partners Group, Hillhouse, TA Associates, Carlyle and Canadian pension funds — had picked up the information memorandum after signing non-disclosure agreements. Only 2 entities cited above submitted binding bids in the end.

Over the years, several PE investors, including InvAscent-led India Life Sciences, CX Partners and TPG Growth, have backed the company. TPG Growth took a 73% controlling stake. In 2018, Apax Partners bought out TPG, CX and the founding shareholders for about Rs 1,950 crore ($300 million).

The domestic surgical sutures market will continue to grow at a compound annual growth rate of over 13% to reach $380 million in 2030, according to a GlobalData report.