Kinetic Concepts to Recombine with Sister Company Life Cell

San Antonio, Texas-based wound-care company Kinetic Concepts Inc. and sister company LifeCell Corp., which specializes in skin and tissue regeneration, are being recombined into one company.

In addition, United Kingdom-based wound-care development firm Systagenix — which KCI is in the process of buying — will be integrated into the combined company once the purchase is completed. The deal is expected to close within the next three months.

The combined businesses will be known as KCI and will be based in San Antonio. It hasn’t been determined if the name eventually will be changed. KCI was founded in 1976 and most likely is best known for its negative-pressure wound-therapy products, including its Vacuum Assisted Closure Therapy System. In 2011, KCI was acquired in a more than $6 billion leveraged buyout by London, UK-based private equity firm Apax Partners and affiliates of two Canadian pension investment management firms. A holding company, Centaur Guernsey LP, was formed for KCI and LifeCell. LifeCell’s products are used for breast reconstruction and hernia repair. The company has been based in New Jersey.

In July, KCI signed an agreement to acquire Systagenix for $485 million. Systagenix supplies more than $20 million worth of wound dressings a month in more than 100 countries.

“Operating as one company will foster collaboration and increased innovation across platforms, leading to exciting new products that will address unmet clinical needs,” Joe Woody, the company’s president and CEO, said in a statement.

Woody has been KCI’s president and CEO and was serving as LifeCell’s interim CEO. Phil Croxford, the current commercial operations leader at LifeCell, has been appointed senior vice president and the permanent leader of LifeCell.

“The combination of KCI, LifeCell and Systagenix will allow us to strengthen our customer relationships, while creating opportunities to cross-sell our products across the entire continuum of care — following the patient from the operating room to the home,” Woody said.

“The combination of these businesses will form a leading medical technology company with over $2 billion in revenue and a very important position within the healthcare system,” said Buddy Gumina, chairman of the board of directors of the parent company of KCI and LifeCell. “The new company, under the proven leadership of Joe Woody, will amplify existing capabilities, open the door for new growth opportunities and improve the lives of patients around the world.”

KCI had acquired LifeCell in a $1.7 billion acquisition in 2008. LifeCell operated as a part of KCI until early 2012, when it was announced that LifeCell would be managed independently. KCI accounted for nearly 75 percent of Centaur Guernsey’s revenue in the quarter ended June 30. However, LifeCell represents the part of the business that has been growing the most. LifeCell generated nearly $115 million in revenue in the second quarter, a 6.6 percent increase from the same period last year. Increased sales volume for its products was cited as the reason for rise, according to a filing with the Securities and Exchange Commission.

KCI’s revenue fell 3.8 percent from the year-earlier period to $317.8 million in the second quarter. The decline was attributed to lower rental revenue. KCI officials previously noted the drop in revenue is slowing, a sign the business is stabilizing. In addition, they have said the company has been accelerating the growth of its products, investing in geographic expansion and diversifying its business.