Six years ago a quartet of PE shops – Blackstone, KKR, Goldman Sachs's PE operation and TPG Capital – paid $11.4 billion for Warsaw, Ind.-based Biomet in a leveraged buyout. The global recession and a slowdown in orthopedic procedure rates hit soon after, with hip procedures up just 1.1% last year. Still, Biomet has managed to boost sales and profits even as it carries a huge debt load on its balance sheet.
Now the PE firms are mulling a complete sale or a public offering for Biomet, the newspaper reported, citing "3 people with knowledge of the situation."
One scenario would see Biomet merge with rival Smith & Nephew, BMO analyst Joanne Wuensch told the Times.
"It is commonly thought that Smith & Nephew and Biomet, which are the 4th and 5th largest companies by market share in the sector, will get together at some point," Wuensch said.
Smith & Nephew and Stryker are valued at about 8.5 times earnings before interest, taxes, depreciation and amortization, according to the newspaper, which would put Biomet's value at about $8 billion.