- Bank of America hired for acquisitions
- Sponsor denies Palex sale, but Apax seen as frontrunner in sale scenario
Private equity (PE) firm Fremman continues to support Barcelona-based Palex Medical in its international growth and in its build-up strategy, which is focused on acquisitions in different European countries, a spokesperson for the sponsor told Mergermarket.
Bank of America was Fremman’s advisor when it acquired a majority stake in the Spanish distributor of high value-added MedTech equipment and solutions in October 2021. The bank is continuing to help the PE and its portfolio company develop a buy-and-build strategy, the spokesperson said.
“There are a few large very sizable potential acquisitions currently in play,” the spokesperson added.
Several large PEs have approached Fremman over recent months to express interest in acquiring Palex if Fremman were willing to consider it, the spokesperson said. Other options being pitched include partnering with Fremman to provide Palex with additional funds to carry out potential sizable transformational acquisitions, the spokesperson added
“Fremman is not interested in selling Palex but is considering all strategic alternatives that would facilitate the path for Palex to carry out sizeable transformational acquisitions and form a clear European leader; and Bank of America is also helping Fremman on this front,” the spokesperson said.
Fremman’s spokesperson denied that the firm had considered or is considering a full sale of Palex. The company has a score of 37, according to Mergermarket's Likely to Exit (LTE) predictive algorithm.*
However, three sources familiar with the situation said that Palex was for sale after receiving approaches from investors. The sale process is not being run in a formal or structured fashion, the three sources said. Two of these sources and a fourth source familiar said that Bank of America was helping Fremman sell Palex.
Apax would be a frontrunner in a sale, two sources said. The PE has been studying a deal for two months, one of the sources said.
CVC would also be a contender, two sources said. However, Palex is a low-priority deal for CVC, one source familiar said. Fremman is unlikely to sell unless it receives a knockout offer, said another source.
Palex Medical generates EBITDA in the region of EUR 57m, one of the sources said. The company could reach around EUR 80m for this year, another source said.
Fremman acquired a majority stake in the company, which is based in Sant Cugat del Vallès in the outskirts of Barcelona, from Ergon Capital Partners and Corpfin Capital in 2021.
CVC, Apax and Bank of America declined to comment.
*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.
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