FRANKFURT May 23 Buyout group EQT has emerged
as the leading bidder for a stake in Germany's Ottobock, the
world's largest maker of artificial limbs, as talks with rival
investor CVC continue, people familiar with the matter said.
The investors have each made an offer to take a 20 percent
stake in Ottobock's core healthcare division as part of efforts
to prepare the company for an eventual stock market listing, the
Ottobock, which was founded in 1919 as a maker of
prosthetics for World War One veterans, said in January it was
worth about 3 billion euros ($3.4 billion) and was being advised
by JP Morgan on the sale.
The field of bidders has since narrowed down to just EQT and
CVC, the sources said.
While EQT is seen as having an edge in striking a deal with
the private company owned by its founder's grandson Hans Georg
Naeder, the talks are not exclusive and may still fall apart,
the people said.
Ottobock, an official partner of the International
Paralympic Committee, is seeking financial backing to develop
more bionic devices, prosthetic limbs and orthotic braces
closely modelled on natural mechanisms.
The deal would help it to pursue "even quicker profitable
growth and groundbreaking innovations for the people suffering a
handicap", Naeder said in the statement at the time.
The 3 billion euro valuation represents a multiple of 12
times the company's expected 2017 earnings before interest, tax,
depreciation and amortisation of 250 million euros.
That's a discount to some rivals as the business includes
lower-margin wheelchairs. Iceland's Ossur, for
example, trades at 17 times expected core earnings.
EQT and Ottobock declined to comment while CVC was not
immediately available for comment.
The company has said in the past it wanted to go public in
2018/19, possibly floating a stake of 25 percent with Naeder
staying in control. It has declined to provide a more specific
timeline for the initial public offering.
($1 = 0.8884 euros)
(Reporting by Arno Schuetze; editing by David Clarke)