CALEDONIA — Parent company Hill-Rom Holdings Inc. has entered a definitive agreement to sell its Caledonia-based Aspen Surgical business unit to a private equity firm for $170 million in cash.
Under the deal announced on Thursday, Aspen Surgical, a maker of scalpels and other surgical products, will become a platform company for Boston-based Audax Private Equity.
The deal, which includes “certain surgical consumable products and related assets,” is expected to close in the fourth quarter of Batesville, Ind.-based Hill-Rom’s fiscal year, subject to closing conditions, according to a statement.
Audax plans to continue growing Aspen Surgical, whose products it describes as “best in breed and standard of care.”
“We are looking forward to working with this team to help hospitals and (ambulatory surgery centers) enhance safety for patients and providers,” Audax Managing Director David Wong said in a statement. “We believe that the Company is poised for growth and Audax will bring the expertise and resources to continue to build the product portfolio.”
The divested products generate annual revenue of approximately $100 million, according to Hill-Rom.
Aspen Surgical currently employs about 500 people at locations in Caledonia and Puerto Rico and manufactures a range of branded and private-label single-use surgical products. Its products include the Bard-Parker brand of safety scalpels.
Grand Rapids entrepreneur Daniel Bowen founded Aspen Surgical in 1999 and later sold the company to Lake Forest, Ill.-based RoundTable Healthcare Partners in 2006. Hill-Rom originally purchased Aspen Surgical for $400 million in July 2012.
“The Company has historically grown both organically and through acquisitions, and we are thrilled to join them as we continue to build on past successes,” stated Audax Managing Director Young Lee.
Audax invests in middle market companies in a range of industries, including health care, business and consumer services, technology and energy. The firm, known for its “buy and build” strategy, has invested more than $5 billion since its inception.
For the $2.85 billion Hill-Rom, a producer of medical beds and equipment, the sale will help the company focus its resources on “high-growth, high-margin categories” in its portfolio, according to President and CEO John Groetelaars.
Audax was advised on the deal by the law firm Kirkland & Ellis LLP. Goldman Sachs & Co. LLC was the financial adviser for Hill-Rom, which used the law firm Jones Day.