by David Holley | Published July 26, 2012 at 4:53 PM
With the $400 million sale of Aspen Surgical Products Holding Inc. to Hill-Rom Holdings Inc., RoundTable Healthcare Partners secured an approximately 4 times gross return on the $60 million in equity it has invested in Aspen, a source familiar with the deal said Thursday, July 26.
The $400 million price tag is a 10.5 times multiple over the company's fiscal 2012 Ebitda -- approximately $38 million -- Hill-Rom said during a quarterly conference call. Aspen had $120 million in revenue for the year, up from only $25 million when RoundTable acquired it in 2006.
Aspen makes disposable medical products focused on staff and patient safety in operating rooms and sterile processing departments. Its products include brands such as Bard-Parker and Colby fluid protection products.
The company's substantial growth is largely thanks to multiple add-on acquisitions Roundtable helped Aspen make between 2006 and 2010, including operating room company Colby Manufacturing Corp., of Philadelphia, and the wound-care and ophthalmics business of British company Unomedical Ltd. in 2009. RoundTable continued making equity and debt investments each time. The private equity firm owned approximately 80% of the business, while Aspen founder Dan Bowen retained the remaining minority stake, the source said
It's not clear what RoundTable paid for Aspen in 2006, though it invested from its $500 million second fund. The firm also bought Aspen's senior subordinated notes, using money from its dedicated $200 million subordinated debt fund that makes fixed-rate debt investments alongside RoundTable's equity investments.
Numbers provided by the source close to the deal indicate that the company had approximately $96 million in debt on its books.
The source said Aspen was attractive to Hill-Rom, a publicly traded company, largely because it could fit into Hill-Rom's existing business as a platform for more acquisitions.
"With the addition of Aspen Surgical, Hill-Rom is well positioned for growth and geographic expansion in our surgical business, particularly in the safety product segments," John J. Greisch, president and CEO of Hill-Rom, said in a statement.
Greg Pritchard, whom RoundTable hired as CEO of Aspen Surgical, is staying on as now senior vice president and president of surgical and respiratory care at Hill-Rom. Terry O'Rourke is taking the helm at Aspen.