2003 Archives

One Equity Partners completes sale of AbilityOne to Patterson Dental Company

CHICAGO, September 15, 2003 – One Equity Partners, the private equity arm of JPMorgan Chase & Co. (NYSE: ONE), and Beecken Petty & Company, a leading health-care private equity firm, have completed the previously announced sale of their controlling interest in AbilityOne Products Corp. to Patterson Dental Company (Nasdaq: PDCO) for approximately $575 million.

With forecasted sales of approximately $220 million for calendar year 2003, Chicago-based AbilityOne delivers the industry’s largest and most comprehensive range of distributed and self-manufactured rehabilitation products to a global customer base serving acute care hospitals, nursing homes, rehabilitation clinics, dealers and schools. With over 15,000 rehabilitation and assistive products from more than 1,500 suppliers, AbilityOne’s catalog is recognized as the industry’s gold standard, and its direct sales force is the largest in the industry.

“AbilityOne is an ideal fit with Patterson to take advantage of the clear synergies between our company cultures and markets,” said Howard A. Schwartz, AbilityOne’s president and chief executive officer. “Patterson’s resources and support will help us accelerate our growth and expand our position as the one-stop-shop for consumable supplies and equipment in the rehabilitation industry.”

“We have significantly benefited from our affiliation with One Equity Partners. Our board has provided significant strategic support and was instrumental in completing the combination with Smith & Nephew, “ he added.

“This sale not only completes a very successful investment for us, but it also serves as another stepping stone for AbilityOne,” said Timothy A. Dugan, partner at One Equity Partners and former Chairman of AbilityOne. “Led by its strong management team, AbilityOne has demonstrated superb growth and has quickly become one of the most talked-about specialty distribution companies in health care.”

One Equity partnered with management to purchase AbilityOne from BISSELL, Inc. in September of 2000. Eighteen months later, AbilityOne purchased Smith & Nephew plc’s Rehabilitation business, a leading provider of products to occupational and physical therapists, as U.K.-based Smith & Nephew retained a 21.5 percent ownership stake in the combined company.

That transaction followed One Equity’s blueprint of partnering with leading health-care companies. Over the past several years, One Equity has made more than 20 investments in medical products, supplies and distribution companies, including AbilityOne, Medex, Inc. and Kendro Laboratory Products.

“We created tremendous value for the AbilityOne shareholders through a strategic combination,” said Kip Kirkpatrick, partner at One Equity Partners. “After analyzing the rehabilitation and assistive products market for investment, we identified AbilityOne and Smith & Nephew Rehab as ideal partners. Creative structuring of the Smith & Nephew transaction combined with an exceptional management team created the world’s leading rehab and assistive products distributor.”

AbilityOne, headquartered in Bolingbrook, Ill., is a leading distributor of rehabilitative and assistive device products used to speed recovery, aid independence and improve mobility for injured, aged and physically challenged adults and children. AbilityOne enjoys strong brand-name recognition – especially for its Sammons Preston products – among health-care professionals, in particular physical therapists and occupational therapists, and medical-equipment dealers.

Earlier this year, One Equity Partners made a major equity commitment to finance the purchase of Quintiles Transnational Corp., which provides a broad range of professional services, information and partnering solutions to the pharmaceutical, biotechnology and healthcare industries. The transaction is expected to close in the next few weeks.

One Equity Partners manages $3.5 billion of investments and commitments for JPMorgan Chase & Co. in direct private equity transactions as well as venture and management buyout funds. Our investment professionals are located across North America and Europe, with offices in New York, Chicago, Detroit, and Frankfurt. One Equity Partners focuses on making majority-ownership investments in late-stage, middle-market companies, with an emphasis on corporate partnerships and divestitures.

This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company’s ability to control. The Company cautions shareholders and prospective investors that the following factors, among others, may cause actual results to differ materially from those indicated by the forward-looking statements: competition within the dental, veterinary, and rehabilitative and assistive living supply industries; changes in the economics of dentistry, including reduced growth in expenditures by private dental insurance plans, the effects of economic conditions and the effects of healthcare reform, which may affect future per capita expenditures for dental services and the ability and willingness of dentists to invest in high-technology products; the effects of healthcare related legislation and regulation which may affect expenditures or reimbursements for rehabilitative and assistive products; changes in the economics of the veterinary supply market, including reduced growth in per capita expenditures for veterinary services and reduced growth in the number of households owning pets; the ability of the Company to maintain satisfactory relationships with its sales force; unforeseen operating risks; risks associated with the dependence on manufacturers of the Company’s products; and the ability of the Company to successfully integrate the AbilityOne business upon consummation of the transaction. Forward-looking statements are qualified in their entirety by the cautionary language set forth in the Company's filings with the Securities and Exchange Commission