Medtronic Sells Physio-Control

Investment firm buys defibrillator business for $487 million


Medtronic, Inc. recently announced plans to sell Physio-Control, Inc. to Bain Capital, a Boston-based private investment firm, in a cash deal worth approximately
$487 million. Once finalized, Physio-Control will become a standalone, privately-held company.


Founded in 1955, Physio-Control employs 650 workers at its Redmond, Wash. headquarters, where it builds LIFEPAK monitor/defibrillators, AEDs, and develops an expanding portfolio of emergency medical response solutions, including the LUCAS 2 chest compression system and LIFENET System of cloud-based data management tools. The company employs an additional 400 workers worldwide.


Bain Capital, founded in 1984, has a long history of investing in leading healthcare companies, including HCA Holdings, Inc., Air Medical Group Holdings, Inc., Quintiles Transitional Holdings Inc., CRC Health Corporation and Warner Chilcott PLC. Assets total about $66 billion.


This isn’t the first time Bain Capital has purchased Physio-Control. In the 1990s, the firm acquired the company from Eli Lilly, and successfully took it public in 1995. Three years later, Medtronic purchased Physio-Control.


According to Cam Pollock, vice president of global marketing for Physio-Control, the sale will not affect customers, at least initially. “In the long-term, we will be much more focused on our customers, especially our EMS customers,” he says.


He says that although Medtronic was a good parent company, its primary interest was hospitals and physicians, not EMS. “We were less than 10% of Medtronic’s overall business,” he says. Pollock expects a greater focus on the unique needs of EMS customers as Physio-Control transitions to a wholly independent company.


The company will continue to be headed by Brian Webster, a long-time Physio-Control employee, who will be named CEO following the deal close. According to a letter to customers, Webster says that Bain Capital purchased Physio-Control for several reasons, including a belief in the strength of the company’s brand, global team, products and innovation pipeline. “With the proper investment, Physio-Control can expand our number one market share position in the world and move into new areas of lifesaving technology,” he says.


Pollock agrees. “We’ll see growth with new products, new product categories and even geographic growth,” he says. The transaction is expected to close in the first quarter of 2012, and is subject to certain regulatory and customary closing conditions.

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