IK-backed Klingel bidder ELOS Medtech frontrunner in late-stage auction

Final bids for the medtech specialist were due last week (6 July), a third source said.

Following first-round bids in May, a total of four parties remained in the running to acquire the German medtech specialist in the Jefferies-led auction, as reported.

Chief among them were Sweden’s Altor and Denmark’s Novo Holdings which have both dropped out of the running, two more sources familiar with the situation said. Sponsor buyers were keen on the buyout, but it was clear a trade buyer with synergy potential would put their bids at risk, a sixth source familiar noted.

Also seen around the asset in a later round was a New York-based AEA Investors-backed trade buyer, as reported. PAI, Onex, Astorg and Ardian were also in earlier rounds but did not pursue the asset given the high valuation expectations, as reported.

First-round offers for Klingel came in at an enterprise value of around EUR 450m, a seventh source familiar said. The vendors were aiming to fetch a EUR 500m price tag for the asset, as reported.

Financiers were willing to provide moderate leverage in the 4.5x–4.8x range structuring debt packages off EUR 26m to EUR 28m of EBITDA, implying a EUR 130m quantum to support bids, as reported. Unitranche options were on the table but the debt fund facility’s higher price compared to a banks, put it at a slight disadvantage, as reported.

IK acquired Klingel nearly five years ago when the company was expecting to generate around EUR 10.8m EBITDA, as reported at the time. The business was eventually levered at around 3.5x to 3.8x with LBBW, SEB and Siemens supplying an all-senior financing package to support the buyout, as reported.

Klingel reported FY22 adjusted EBITDA of EUR 30m on EUR 135m in sales and is expected to hit FY23 adjusted EBITDA of EUR 34m on EUR 151m in sales, as reported. Business forecasts are rosy, with sales projected to reach EUR 249m in four years.

Founded in 1986 and headquartered in Pforzheim in Baden-Württemberg, Klingel is a provider of high-quality and complex high-end components, instruments and implants for prevention, diagnosis, surgical procedures, therapy and rehabilitation. The company has around 850 employees and operates eight production sites and 450 CNC machines.

Elos Medtech has over 650 employees and a turnover of approximately SEK 950m. Elos Medtech has been listed on NASDAQ Stockholm AB since 1989, according to its website.

IK, Jefferies and Novo declined to comment. ELOS, Klingel, TA, Novo and Altor did not respond to requests for comment.

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