The Blackstone Group has agreed to pay $1.6 billion (€1.2 billion) for DJO, which supplies devices and services for musculoskeletal and vascular ailments. The deal includes the assumption of debt in addition to DJO’s current market cap of $1.18 billion.
Blackstone will pay $50.25 per share for each outstanding share of DJO’s common stock, a 25 percent premium over DJO’s average closing price for the 30 trading days ended 13 July. Credit Suisse and Bank of America will provide debt financing for the deal.
Blackstone will make the acquisition, which is expected to close in the fourth quarter, through its portfolio company ReAble Therapeutics, a medical device company the firm bought in 2006 for $903 million. Blackstone will merge the two companies to “offer a broad go to market approach through multiple sales channels”, according to a statement.
DJO has 50 days to find a better offer, although the agreement with Blackstone comes with an $18.7 million break fee.
Blackstone has been working to grow its healthcare portfolio, which currently holds five companies. The firm is part of a consortium including Kohlberg Kravis Roberts, TPG, and Goldman Sachs Capital Partners that agreed in early June to pay $11.4 billion for orthopedics products maker Biomet.
Credit Suisse is Blackstone’s financial advisor for the transaction, and Simpson Thatcher & Bartlett is its legal advisor. Wachovia Securities is DJO’s financial advisor and Latham & Watkins is its legal advisor.