Capturing Value for a Remarkable Brand
Client: LXU Healthcare, Inc. sold to Integra LifeSciences Holdings Corp. (NasdaqNM: IART)
Transaction: On May 8, 2007, Integra LifeSciences closed its acquisition of Burnham’s client, LXU Healthcare, for $30 million in cash. This purchase price represents a double-digit trailing twelve month EBITDA multiple, a full valuation despite deteriorating revenue and profits. By comparison, larger and more profitable companies in this space had recently sold at less than seven times EBITDA.
The Burnham Solution: Burnham was able to extract this extra value by properly positioning LXU’s key strength: its brand. LXU’s Luxtec surgical headlight system is the gold standard among surgeons. Burnham ran a competitive process that resulted in multiple bidders. Burnham then identified the buyer most capable of recognizing (and paying for) the value inherent in this brand, as opposed to a bidder willing to pay based only on financial metrics.