BSN scrapped amidst leverage drought

The sale of German wound care company BSN Medical has been scrapped by vendor Montagu Private Equity.

The London headquartered firm was rumoured to be looking for between €1.6bn and €1.9bn by the end of March next year, but with the leveraged market closed, Montagu decided to hold on to the business.

BSN was acquired at the beginning of 2006 in a €1.03bn deal with Smith & Nephew, London, and Beiersdorf, Hamburg.

Formed in April 2001 to combine the casting and bandaging, general wound care and phlebology business of Beiersdorf and Smith & Nephew, it has made two acquisitions whilst in private equity hands. At the end of 2006 it bought the French Cognon-Morin Group, specialist in compression therapy products; in November 2007 it acquired FLA Orthopedics, a US manufacturer of orthopaedics soft goods (OSG) and bracing products.

The difficulties faced by Montagu are echoed across the market where deals are either coming in short after a long time in the market, or not coming at all – Apax’s £1bn purchase of UK media house EMAP has been pulled after bookrunners HSBC, GE, Lloyds TSB and RBS were unable to complete syndication. In August, the banks were forced to repackage the debt structure after the original package was met with a lukewarm response.

However, bankers are willing to support businesses which show signs of performing against the downturn. Hungarian healthcare group Euromedic was acquired by Ares Life Sciences and Merrill Lynch Global Private Equity in June, and has no problem in attracting investors.