Kinetic Concepts to repay bank debt, repurchase notes with IPO proceeds

By Sara Rosenberg

New York, Feb. 2 - Kinetic Concepts Inc. estimates paying down $44.75 million of debt under its senior credit agreement with proceeds from the initial public offering of its common stock. Furthermore, the company plans to apply at least $25.75 million of the offering proceeds to the repurchase of a portion of its 7 3/8% senior subordinated notes due 2013 at a price equal to 107.375%.

The estimated pay down is based on the assumed initial public offering price of $28 per share, making total proceeds from the IPO about $89.5 million after deducting underwriting discounts and commissions and estimated offering expenses, according to an S-1 registration statement filed with the Securities and Exchange Commission on Monday.

Any remaining net proceeds will be used for general corporate purposes, including working capital, research and development, sales and marketing efforts and acquisitions and other strategic investments.

On Aug. 11, the company closed on a $480 million term loan due Aug. 11, 2010 and a $100 million revolver due Aug. 11, 2009. As of Dec. 31, the revolver was undrawn.

Kinetic Concepts is a San Antonio, Texas, medical device company.

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