Wellspect auction in final stretch with Blackstone, EQT and KKR to battle it out

A longer list of sponsors were submitted to the second round in mid-April which also included CVC and PAI, as reported, but now only a few are preparing final bids, the sources said. Bids are due imminently, a fourth source familiar added.

Charlotte, North Carolina-based Dentsply Sirona launched a process in February to divest Wellspect, which is expected to generate between EUR 80m to EUR 100m annual EBITDA, as reported. Dentsply selected Centerview Partners to guide a process to divest the business, as reported.

Bid financing has yet to be finalized but banks and direct lenders are both waiting in the wings to support a sponsor buyer, as reported. Distribution to capital markets is possible and that may ultimately be the more favourable route given the company's size, the first source noted.

Dentsply might look to get around USD 1bn from a carve-out of Wellspect, according to a newswire report.

A lot will hinge on the company's valuation, the first source noted. "Sponsors find it challenging buying into the equity story at the valuation they (the vendor) want," this source continued.

It is difficult for the business to lose market share which makes the business defensive and a good credit but on the flip side it is also hard to gain market share. "It's a relatively low growth case and not easy to find ways to grow materially," this source thought.

It is not a straightforward case, the second source continued. While it is a great standalone business as a corporate carve-out and has market share to show for it, there are some go-to-market issues. "The company's US product is good but too expensive," the second source added.

The US-based company had attempted to sell Wellspect Healthcare about five years ago, as reported at the time. The US-based professional dental products specialist subsequently divested Wellspect Healthcare's surgery and respiration business to Sweden's AddLife in late 2018 for around EUR 18m, as reported.

Mölndal, Sweden-based Wellspect is a manufacturer of intermittent urinary catheters, launching its flagship product line LoFric in 1983. Its product range also supports ways to empty bowels and prevent against leakage.

Dentsply Sirona manufactures professional dental products and technologies with global headquarters in York, Pennsylvania, USA, and international headquarters in Salzburg, Austria.

Dentsply, Blackstone, EQT and KKR declined to comment.

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• Topics
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• Blackstone Group
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