TAKE A LOOK AT WHICH REPORT YOUR PORTFOLIO'S BEEN MISSING...

Shareholders Foundation offers real-time reporting of class action exposure on a per transaction basis,
including the documents you will need for claim filing and settlement recovery.
Start Monitoring Your Investments

Kinetic Concepts, Inc. Investor Files Lawsuit To Stop Proposed Buyout

  • If you purchased shares of Kinetic Concepts, Inc. (NYSE: KCI) and currently hold those KCI, you have certain options and you should contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
Security

Case Name
Kinetic Concepts Deal Case 07/29/2011
Type of Lawsuit
Mergers and Acquisition
You must register or login to receive notifications.

Click here to subscribe to Kinetic Concepts, Inc..
Summary

An investor in shares of Kinetic Concepts, Inc. (NYSE: KCI) filed a lawsuit in State Court against directors of Kinetic Concepts in effort to stop the proposed buyout of Kinetic Concepts, Inc. by a consortium comprised of funds for $68.50 per KCI share.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to Kinetic Concepts, Inc. (NYSE:KCI) investors arising out of the attempt to sell Kinetics Concepts too cheaply through an unfair process.

On July 13, 2011, Kinetic Concepts, Inc. (NYSE: KCI) announced that it has entered into a merger agreement under which a consortium comprised of funds advised by Apax Partners, together with controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board, will acquire Kinetic Concepts, Inc for $68.50 per KCI share in cash in a transaction valued at $6.3 billion (including KCI’s outstanding debt). Kinetic Concepts, Inc said the $68.50 offer represents a premium of approximately 21 percent to the one-month historical average stock price of $56.49 through July 5, 2011 (one day prior to speculation of a transaction) and a premium of 52 percent to the 12-month historical average stock price of $45.01 through July 5, 2011.

However, the plaintiff claims the $68.50 offer undervalues the company. In fact Kinetic Concepts, Inc. has performed well for its investors in the past. Its 12months Total Revenue rose from $1.6billion in 2007 to $2.01billion in 2010. Kinetic Concepts reported an increased first quarter Revenue for the first quarter in 2011. Its first quarter Revenue went from $485.81million a year earlier to $501.18million. Its first quarter quarterly Net Income rose from $52.71million to $68.42million.

Additionally the plaintiff alleges that the sale process is unfair to KCI stockholders. Kinetic Concepts, Inc said that James R. Leininger, founder of Kinetic Concepts and chairman emeritus, and certain shareholder parties related to or affiliated with him, which collectively hold approximately 11% of the company’s outstanding shares, have already entered into a voting agreement with the consortium under which those shareholders have agreed to vote their shares in favor of the transaction.