Industrial equipment maker Colfax has agreed to buy orthopedic device maker DJO Global from private equity funds managed by Blackstone Group for $3.15 billion, the companies announced on Monday.

But the news that Colfax would explore strategic options for its unit that makes compressors and turbines for oil and gas companies seemed to concern analysts.

Colfax shares were down 15% on the news.

Orthopedic devices are “a completely new market for the firm, outside of the industrial market. Also, the strategic review of the non-welding business was unexpected,” Northcoast Research analyst Tom Hayes said.

Colfax’s air and gas equipment business accounted for about 40% of its total revenue in 2017.

Colfax said it expects to finance the DJO Global purchase with about $100 million in cash off its balance sheet and would also use the proceeds from credit facilities and a possible debt offering. It is also a contemplating an equity offering of $500 million to $700 million.

JPMorgan and Credit Suisse have committed to providing bridge financing.

DJO had revenue of $1.2 billion for the year ended September 2018 and recorded adjusted EBITDA of $269 million.

In a statement, Colfax Chief Executive Officer Matt Trerotola said the company was committed to reducing leverage and having a flexible balance sheet in the short term.

After closing, DJO Global will operate as a new business segment within Colfax. DJO’s CEO Brady Shirley would lead the new segment and report to Trerotola.

The companies said the deal would boost adjusted per-share earnings in the first full-year after closing and would generate a tax benefit (for the combined company) from net operating loss carryforwards of $800 million.

“The acquisition of DJO is a compelling next step in the strategic evolution of Colfax that creates a new growth platform in the high-margin orthopedic solutions market,” Trerotola said.

Trerotola also noted the markets DJO operates in are less cyclical.

DJO Global is a combination of two companies, ReAble Therapeutics, which Blackstone acquired in 2006, and DJO Opco, which was bought by ReAble in 2007. Blackstone acquired ReAble for $529 million. The DJO Opco deal was valued at $1.8 billion.

Colfax’s purchase of DJO Global is expected to close in the first quarter of 2019.

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