This Week in Private Equity: Kinetic Concepts, Nokia/Siemens, and the NBA

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What’s new this week in private equity? Some deals were struck, some were tossed, and one sports league could eventually face an industry-wide takeover.

Kinetic Concepts: Worth an astonishing US $6.3 billion

Kinetic Concepts: bought for $6.3 billion

This week saw the buyout of one of the US’s biggest medical technology companies, Kinetic Concepts, by a handful of private equity funds in a deal spearheaded by Apax Partners. Kinetic develops and markets therapeutic products for the regenerative wound and medicine care markets in the US and internationally.

The investors will assume control over all the company’s outstanding stock, representing a buyout price of about US $88 per share, a nearly 30% premium to today’s trading price. The deal speaks volumes for the outstanding performance of the company, but also for the healthcare market as a whole, a growing target market of interest for worldwide equity dollars.

Where Apax scores, TPG and Gores Group fall flat with no deal

As early as February of this year, private equity firms TPG Capital and Gores Group had expressed interest in pursuing substantial stakes in network technology giant Nokia Siemens Networks, according to sources familiar with the closed-door discussions. But this week the company rejected the proposals by the private equity firms to snatch up a chunk of the company’s shares.

If the merger of Nokia and Siemens alone comes as a surprise to you, here’s some background: Nokia’s shares have been pounded over the last few years as Europe’s biggest mobile handset makers continue to lose immense ground and market share to US manufacturers like Apple and Google.

So Nokia partnered with Siemens to create Nokia Siemens Networks, one of the world’s largest telecommunications and network equipment manufacturers. Shares of the company fell on the news that the deal fell though.

Could the US NBA be completely bought out by private capital partners?

It’s an interesting notion. The National Basketball Association, the US’s professional basketball league, has certainly had its financial ups and a down in it’s over 50 years of existence. But no economy has slammed the team owners quite like todays.

The league is plagued with cash-flow troubles; a considerable trend in declining revenues; hundred-million dollar loses yearly; and lock-outs as a result of players and unions demanding more money. The industry is ripe for some PE-picking and outside restructuring.

Yesterday Apollo Global Management, a colossal and powerful private equity firm, announced plans to purchase the Philadelphia 76ers for a reported $280 million in cash. Among some of the other funds who have a hand in the deal is The Blackstone Group.

All told, this is the fourth time in less than a decade that a professional US basketball company has been taken over by private equity. And it’s not just basketball, either – some will recall Bain Capital’s takeover bid for the entire National Hockey League (NHL), the US’s storied hockey team franchisor. The proposed sale price: just US $500 million. The league’s team owners collectively, although probably very politely, rejected the offer.

Sources: Bloomberg and the Business Insider