KKR pays $5.7B to take Integer Holdings private in medical CDMO consolidation

KKR will acquire Integer Holdings in an all-cash transaction valued at approximately $5.7 billion, taking the medical device contract development and manufacturing organization private in one of the largest healthcare equipment buyouts of the year. The deal removes a publicly traded CDMO from the neuromodulation and cardiac rhythm device supply chain at a time when OEMs are renegotiating supplier relationships and battery technology is shifting toward miniaturization.

Integer manufactures batteries, enclosures, and sub-assemblies for implantable cardiac devices and neurostimulators, operating as a Tier 1 supplier to Medtronic, Boston Scientific, and Abbott. The company reported $1.6 billion in trailing twelve-month revenue as of Q2, with gross margins near 28% and EBITDA margins in the low teens. KKR is paying roughly 3.6x trailing revenue, a premium to the 2.8x median for publicly traded medical device suppliers but below the 4.2x average for private buyouts in the segment over the past eighteen months. The transaction implies an enterprise value near $6.2 billion after assuming Integer's net debt position.

The timing reflects two structural shifts. First, large-cap device OEMs are consolidating their supplier bases to reduce regulatory complexity and streamline battery certification pathways as next-generation rechargeable and solid-state chemistries move through FDA pre-submissions. Integer holds long-term supply agreements with OEMs that include co-development provisions and shared IP, making it difficult for competitors to displace without multi-year requalification cycles. Second, private equity has been underweight medical manufacturing assets since the pandemic supply chain disruptions, and KKR is re-entering the space with a portfolio company that has contracted revenue visibility extending into 2029 on key platforms.

For allocators, this is a test case for whether PE can extract value from low-margin, capital-intensive manufacturing in a sector where regulatory lock-in matters more than pricing power. Integer's EBITDA grew 11% year-over-year in the most recent quarter, but operating cash flow conversion remains below 60% due to working capital swings tied to OEM order timing. KKR will likely pursue margin expansion through procurement scale, facility rationalization in Switzerland and Mexico, and selective exits from lower-margin product lines. The firm has not disclosed whether it will dividend-recap the business or pursue a longer hold with an industrial buyer as the exit.

Watch for two follow-on events. Integer's Board is expected to approve the transaction within 30 days, with shareholder vote and regulatory clearance targeted for Q4. Second, Medtronic and Boston Scientific will file updated supplier disclosures in their next 10-Qs, which will indicate whether they negotiated pricing concessions or exclusivity extensions in exchange for consenting to the change in control. If either OEM re-bid portions of Integer's scope, that surfaces as a risk factor in the proxy filing.

KKR last exited a medical device supplier—Avantor—in 2021 at 5.1x revenue after a three-year hold. Integer's valuation leaves room for a similar multiple expansion only if EBITDA margins reach the high teens, which requires either higher-margin neuromodulation growth or a shift in contract terms that OEMs have historically resisted.