Lake Forest-based I-Flow Corp., maker of a device to treat pain after surgery, is being bought by Kimberly-Clark Corp. as the diaper and Kleenex maker looks to boost its healthcare business.
Kimberly-Clark is buying I-Flow for $324 million. The deal is valued at $276 million after factoring in I-Flow’s cash and equivalents that will go to Kimberly-Clark.
The buyout values I-Flow at about 8% more than it was worth before the offer on Thursday.
Shares of I-Flow closed up about 7% on a market value of about $308 million.
I-Flow is set to operate as part of Kimberly-Clark Health Care, which has yearly sales of about $1 billion from infection control products, surgical equipment and medical devices for pain management and breathing and digestive conditions.
Earlier this week, Kimberly-Clark said it was buying the pain management business of Montreal’s Baylis Medical Co.
The I-Flow acquisition is expected to close in the current quarter.
I-Flow, with yearly sales of about $140 million, makes devices that provide targeted anesthesia as an alternative to pain pills for patients after surgery.
Its On-Q is a pump and catheter that delivers pain-relieving, non-narcotic drugs to a targeted area in the days after surgery.
The company touts its products as a more effective alternative to pain pills, the dominant method of post-surgical treatment.
It’s biggest challenge has been selling On-Q to doctors, who often see pain pills as a more cost-effective short-term treatment after surgery.
I-Flow employs 120 people locally and about 400 overall. It’s unclear how the local operations will be impacted with the acquisition.
Chief Executive Donald Earhart has run the company for nearly 20 years. He owns a 6.5% stake worth about $20 million in buyout, before factoring in costs for exercising options.
The company’s biggest shareholder is the State of Wisconsin Investment Board, a state pension fund manager, at a 10% stake.
