Tecomet is a leading contract manufacturer of precision-engineered medical devices and components, including orthopedic implants used in such procedures as knee and hip replacements. The company also produces trauma, spinal and cranial implants, as well as precision-engineered components for the aerospace industry. A former operating unit of Cardinal Health, Tecomet was acquired in 2008 by Charlesbank Capital Partners, a Boston-based private equity investment firm with $1.8 billion under management.
- 面临的难题
-
In early 2008, Cardinal Health decided to divest its clinical and medical products operations in order to focus on its core medical and pharmaceutical distribution businesses. As part of that process, Cardinal started looking for a buyer for Tecomet, a premier contract manufacturer of precision components for the healthcare and aerospace industries.
Charlesbank Capital Partners had been looking to invest in a platform medical device company and saw Tecomet as a perfect fit for its investment portfolio. As a leading provider of titanium surgical implants, Tecomet’s growth prospects are excellent. The company stands to benefit from improvements in medical technology and an aging population that includes baby boomers committed to an active lifestyle.
To acquire Tecomet, Charlesbank needed to find the right financing partner to help them complete the transaction. The challenging credit market of mid-2008 had created a difficult environment for leverage buyouts. Further complicating matters was Cardinal Health’s mandate that the transaction be completed by the end of the third quarter.
- 解决方案
-
After negotiating acquisition terms with Cardinal Health, Charlesbank contacted CIT in July to discuss options for financing the acquisition. Charlesbank and CIT Sponsor Finance have developed a good relationship over the past several years after working on a handful of other potential transactions.
For the Tecomet acquisition, CIT Sponsor Finance called on the expertise of CIT Healthcare, which offers a full range of financial solutions and advisory services for the healthcare industry. In addition, representatives of CIT Aerospace and Defense were brought in to evaluate the aerospace component of Tecomet’s business.
Financing specialists from the three CIT business units liked what they saw. They recognized Charlesbank’s excellent track record and proven ability to acquire and manage businesses across a diverse portfolio of quality investments.
Broad and deep industry expertise enabled CIT to recognize and become confident in Tecomet’s strengths, including experience in leading-edge titanium forging, precision machining and photo-etching processes. They also were impressed by the company’s proven business model, seasoned management team, top-tier customer relationships and excellent industry reputation. Finally, CIT team members agreed with Charlesbank’s optimistic assessment of the company’s future growth prospects in its dynamic served industries.
As a result, CIT proposed a senior secured credit facility to help Charlesbank complete the Tecomet acquisition.
- 结果
-
Charlesbank selected CIT Bank and one additional lender to provide the $50 million senior secured financing that enabled Charlesbank to complete the Tecomet acquisition at the end of September 2008; additionally, CIT Healthcare served as Administrative Agent and CIT Capital Securities LLC was named Lead Arranger. In choosing CIT Healthcare to serve as Administrative Agent, Charlesbank recognized the financer’s commitment to the healthcare and aerospace industries, financial resources, and record for building lasting customer relationships.
Despite extremely challenging conditions in the credit markets, CIT was able to execute the transaction quickly and efficiently to meet Cardinal Healthcare’s September 30 deadline. The transaction was one of a very few leveraged buyouts completed in the third quarter of the year.
Tecomet management expressed confidence about their ability to grow the business in the years to come, both by expanding current lines of business and potentially acquiring other companies.
