US-based diversified technology company Colfax has signed a definitive agreement to acquire DJO Global, a provider of orthopaedic devices, software and services, from private equity funds managed by Blackstone for $3.15bn in cash.
DJO offers a range of orthopaedic care solutions and products including reconstructive implants, bracing, software and services, and rehabilitation devices.
Colfax president and chief executive officer Matt Trerotola said: “The acquisition of DJO is a compelling next step in the strategic evolution of Colfax that creates a new growth platform in the high-margin orthopaedic solutions market.
“As a clear market leader in bracing and rehabilitation systems – with a track record of innovative new products, globally recognized brands, and a diverse product portfolio – DJO is well-positioned to benefit from secular trends driven by changing demographics and increased preventive healthcare.”
This deal is part of Colfax’s strategy to diversify its portfolio and end-market exposure, cut down cyclicality and boost profitability.
Trerotola added: “We see significant opportunities to apply our proven Colfax Business System across DJO to create a continuous improvement culture, further improve productivity and margins, and accelerate innovation and new product development.”
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DJO president and CEO Brady Shirley said: “Joining Colfax is a win for our customers, and all DJO stakeholders. Colfax has the financial strength, experience, and proven business system to support our operational performance and growth.”
Headquartered in Vista, California, DJO has 18 locations around the world. It has approximately 5000 employees.
For the twelve month period ending September 2018, DJO’s revenue was $1.2bn and its adjusted EBITDA was $269m.
The transaction is expected to close in the first quarter of 2019, following regulatory approvals.
Colfax plans to fund the deal with around $100m of cash from its balance sheet, proceeds from credit facilities and a planned debt offering, and $500 to $700m from a planned offering of equity or equity-linked securities.
For the deal, JP Morgan and Credit Suisse have committed to offering bridge financing.
In this deal, JP Morgan is a financial advisor, and Kirkland & Ellis is the legal advisor to Colfax. Goldman, Sachs & Co, Credit Suisse, and Wells Fargo Securities are financial advisors and Simpson Thacher & Bartlett is a legal advisor to DJO.