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DUFF & PHELPS ASSIGNS 'B' RATING TO WRIGHT MEDICAL TECHNOLOGY, INC.'S $85 MILLION 10.75 PERCENT SENIOR SECURED NOTES DUE 2000

 NEW YORK, Jan. 14 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned an initial rating of "B" (Single-B) to Wright Medical Technology Inc.'s $85 million 10.75 percent Series B senior secured notes due 2000. These notes were issued in exchange for an equivalent amount of Series A senior secured notes originally issued under Rule 144A in June 1993. Proceeds from the original note offering were used to provide financing for the acquisition by Kidd Kamm Equity Partners, L.P. and management of the orthopedic implant business of Dow Corning Corporation. The D&P rating reflects Wright's historical track record of growth and profitability, offset by a leveraged capital structure and high capital investment requirements.
 Wright Medical Technology was formed in 1993 to acquire the knee and hip implant business of Dow Corning Corporation for a total purchase price of $70.5 million. Financing for the transaction was provided by $81 million of net proceeds from the senior secured notes and $15 million of common equity contributed by Kidd Kamm and management. Remaining proceeds of approximately $25 million are designated for development of the small joint implant business, for international expansion and for working capital.
 The D&P rating incorporates Wright's leading market share in the higher-margin small joint implant segment, and number three position in the growing knee implant market behind subsidiaries of Bristol-Myers and Pfizer. The orthopedic implant market has historically increased by about 9 percent annually, resulting from an aging U.S. population as well as increased acceptance of orthopedic implant procedures. While Wright is well-positioned for further growth, high product development costs combined with 85 percent debt leverage may inhibit the company's ability to maintain market share.
 Interest coverage for the three months ended Sept. 30, 1993, was relatively thin, with EBITDA of $3.2 million covering interest expense only 1.4 times. However, this coverage level also reflects the impact of non-recurring consulting fees, and also start-up costs associated with expanded international operations and new small joint manufacturing facilities. The D&P rating of "B" anticipates that ongoing interest coverage levels will be closer to 2 times. At Sept. 30, 1993, Wright's balance sheet exhibited satisfactory liquidity with $23 million of cash and unused revolving credit availability of $30 million. Duff & Phelps expects that most of the cash will be reinvested in fixed and working assets over the next 18 months as Wright expands its small joint manufacturing operations and presence in international markets.
 -0- 1/14/94
 /CONTACT: Scott J. O'Shea or Thomas P. Razukas, CFA, of Duff & Phelps Credit Rating Co., 212-908-0200/


CO: Wright Medical Technology Inc. ST: IN: MTC SU: RTG

TW -- NY029 -- 1193 01/14/94 12:08 EST
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Publication:PR Newswire
Date:Jan 14, 1994
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