EU Commission approves acquisition of medical tech company Kinetic Concepts by private equity fund APAX

Brussels, 07 October 2011 – The European Commission has cleared under the EU Merger Regulation the proposed acquisition of US medical supplier Kinetic Concepts, Inc. by UK-based APAX Partners LLP, a private equity fund manager.

The Commission concluded that the merged entity would face effective competition in all markets concerned and that competitors would continue to have sufficient purchase and sales alternatives. The Commission therefore decided that the transaction would not significantly impede effective competition in the European Economic Area (EEA)1 or any substantial part of it.

The activities of APAX and Kinetic do not overlap. However, the transaction would have potential effects on the supply chain as Kinetic produces advanced, active wound care products, tissue matrices and speciality hospital beds, whilst APAX-controlled companies operate hospitals in the UK (General Healthcare Group Ltd.), Sweden, Norway, France and Germany (Capio AB).

The Commission’s inquiries found that post-merger these companies would have neither the capability nor the incentive to prevent competing hospitals from obtaining wound care products from the merged company, or upstream competitors active in wound care from supplying the merged company’s hospitals, in view of the low proportion of purchases made by the hospitals controlled by Apax in comparison to the total products sold by Kinetic and the fact that Apax only holds a minority of the economic rights in the hospital companies.

The transaction was notified to the Commission on 2 September 2011.

Merger control rules and procedures

The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

A non-confidential version of today’s decision will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6343

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