Halyard Health to Acquire CORPAK MedSystems for $174 Million

Halyard Health Inc. is acquiring privately held CORPAK MedSystems (Corpak) in an all-cash deal of $174 million. The deal will be funded with a combination of current cash and Halyard’s revolving credit facility and is expected to close in the second quarter. Corpak, a portfolio company of Linden Capital Partners, develops, manufactures and markets a broad range of high-quality, branded enteral access devices.   

Buffalo Grove, Ill.-based Corpak has an extensive history of innovating enteral access solutions to improve patient outcomes, safety and comfort. Its portfolio of nasogastric tubes complements Halyard’s existing enteral feeding products and creates a complete offering of enteral feeding solutions for patients and caregivers. Corpak’s fiscal 2015 sales totaled approximately $54 million.

“We are excited to integrate Corpak’s products into our enteral feeding portfolio, enabling us to serve our doctors and their patients more broadly,” said Robert Abernathy, Halyard chairman and CEO.  “Corpak’s business aligns well with our existing medical devices segment, with slightly higher sales growth and similar gross margins. This first acquisition is an important step in achieving our strategic vision of transforming Halyard into a leading medical devices company, and positioning our business for future growth.”

The transaction is expected to be five cents accretive to Halyard’s fiscal year 2016 adjusted dilutive net earnings per share excluding acquisition, integration-related and intangible amortization charges.  As such, the company is updating its previously announced full year 2016 adjusted diluted EPS guidance to $1.50 to $1.70. In 2017 the transaction is expected to be approximately 15 cents accretive. 

“Corpak achieved above-market growth through our focus on innovation, team and culture, and strategic realignment to become the ‘preferred enteral partner,'” said Frank McCaney, CEOf of Corpak.  “We believe that Corpak is well positioned for continued achievement and long-term success with Halyard, a company that understands our business, supports our goals and embraces our values.”

The transaction closing is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Robert W. Baird & Co. served as Halyard’s exclusive financial advisor and Alston & Bird LLP served as outside legal counsel for Halyard in connection with this transaction. Houlihan Lokey Inc. served as Corpak’s financial advisor and Kirkland & Ellis LLP served as legal counsel in connection with this transaction. 

Halyard Health Inc. is a medical technology company focused on preventing infection, eliminating pain and speeding recovery for healthcare providers and their patients. Headquartered in Alpharetta, Ga., Halyard is committed to preventing healthcare-associated infections and reducing the use of narcotics while helping patients move from surgery to recovery. Halyard’s business segments – Surgical and Infection Prevention and Medical Devices – develop, manufacture and market clinically superior solutions that improve medical outcomes and business performance in more than 100 countries.

Linden Capital Partners is a Chicago, Ill.-based private equity firm focused exclusively on leveraged buyouts in the healthcare and life sciences industries. Linden invests in middle market platforms in the medical products, specialty distribution, pharmaceutical, and services segments of healthcare.