Ottobock targets private equity firms looking for 20% stake

Image credit: Reuters/Suzanne Plunkett

Germany’s Ottobock, the world’s largest maker of artificial limbs, has attracted interest from private equity groups including KKR and CVC for a 20% stake in its core business, people familiar with the matter said on Monday.

The suitors for the stake in its core healthcare division also include buyout firms BC Partners and Advent, the people told Reuters.

Ottobock is reportedly seeking financial backing to develop more bionic devices; prosthetic limbs and orthotic braces closely modeled on natural mechanisms.

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The privately held company, owned by the founder’s grandson Hans Georg Naeder, said on Friday it was targeting private equity firms, affluent families and technology funds as potential buyers in a deal to be completed by the end of June, ahead of an initial public offering at a later stage.

Ottobock, which started in 1919 as a maker of prosthetics for World War One veterans, said it was currently valued at about £2.6 billion and that it was being advised by J.P. Morgan in the planned stake sale.

The deal would help it to pursue “even quicker profitable growth and groundbreaking innovations for the people suffering a handicap”, Naeder said in the statement.

The valuation would equate to a multiple of 12 times its expected 2017 earnings before interest, tax, depreciation and amortization of £217 million, a discount to some rivals as the business includes its lower-margin wheelchair business, one of the people said.

The investment firms and Ottobock declined to comment when pressed by Reuters.

The company said last October it was considering the sale for up to £209 million of its Ottobock Kunststoff division, a maker of engineering foams, to focus on healthcare.

Ottobock reported sales of £800 million for 2015.

The company said in July 2015 it wanted to go public in 2017, possibly floating a stake of 25% with Naeder staying in control. It declined to provide a more specific timeline for the IPO on Monday.

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