Pacific Equity Partners (PEP) is to exit its large majority stake in Melbourne-based surgical products distributor Lifehealthcare to EBOS Group (ASX/NZX: EBO) for about $1.167 billion.

The deal values Lifehealthcare at 11.5 times forecast EBITDA.

The transaction involves 100% LifehHealthcare’s Australian and New Zealand subsidiaries and 51 per cent of the company’s Asian subsidiary Transmedic. The remainder of Transmedic will be retained by the company’s founders.

The acquisition of Lifehealthcare will add surgical implants to products offered by EBOS. Lifehealthcare is a significant supplier of implants for spinal and orthopaedic surgery and provides consumables used in surgery.

EBOS said Lifehealthcare is one of the largest independent distributors in Australia, New Zealand and South-East Asia of third-party medical devices, consumables and capital equipment plus in-house manufactured allowgraft material. Lifehealthcare generates annual revenue of more than $9 billion.

EBOS expects the acquisition of Lifehealthcare to substantially accelerate its medical devices strategy building efficiencies of scale.

PEP acquired a majority stake in Lifehealthcare in 2018 for $211 million and has since made numerous bolt-on acquisitions in Australia and throughout Asia growing the company’s customer base and product range as well as geographical reach.

PEP is being advised on the deal by law firm Allens while EBOS is being advised by Macquarie Capital, Lazard and law firm King & Wood Mallesons.