In the February 2007
issue:
Medical Devices Set Strong Pace - Sector Leads Robust Consolidation In
2007
The medical device sector posted strong numbers in January’s M&A market.
Particularly noteworthy is the presence of private equity firms as buyers.
...
New Year’s Hospital M&A - Hospitals Realign
In The New York City Metropolitan Area
The New York City metropolitan hospital market is realigning into smaller,
regionally focused networks. Roman Catholic facilities are figuring
prominently in this transformation.
...
Looking Ahead At Health Care M&A
Turner Bredrup of Harris Williams spoke with us about trends to watch for in
the 2007 health care M&A market.
...
In The Departments
Services
-
Health Care Services
-
Deal Summaries
-
Additional Transactions
-
Transaction Updates
Technology
-
Health Care Technology
-
Deal Summaries
Additional Transactions
-
Transaction Updates
Sign up for a trial subscription and get
the current issue!
Read more about
The Health Care M&A Monthly.
Articles Archive
Companies Mentioned in this issue:
February 2007
A
Abbott p1
Actavis hf p16
Advanced Medical Optics p9
Affiliated Computer Services p14
Albion p14
Amgen p10
Amphora Discovery Corporation p10
Angelo, Gordon & Co. p4
AOL p15
Apax Partners p1
Apotex p15
Arcadia Resources p9
Argenta Discovery p15
AstraZeneca plc p15
Aventis p15
B
Bank of America p10
Barr Pharmaceuticals p16
Bayonne Medical Center p2
Beckloff Associates p9
Blackstone Group p9
Blue Acquisition Corp. p16
BNP Paribas p15
Bon Secours Cottage Health Services p2
Bon Secours Health Care System p2
Bridge Regional Health System p2
Bristol-Myers Squibb p15
Brooklyn Queens Health Care System p2
C
Cambridge Antibody Technology p15
Cardinal Health p9
Caremark Rx p8
Caritas Health Care p2
CCMP Capital Advisors LLC p16
Cell Therapeutics p14
Cinven p16
Citigroup Corporate and Investment Banking p9
Clayton, Dubilier & Rice p9
Comprehensive Care Corp. p4
CRT Capital Group p3
CVS Corp. p8
Cytokinetics p10
D
DOR BioPharma p14
DOV Pharmaceutical p10
E
Eli Lilly & Co. p8
Eureka Capital Partners p4
Express Scripts p8
F
Formation Capital p8
Fresenius Medical Care p7
G
GE Healthcare p1
Genentech p10
General Hospital Center p2
Genesis HealthCare Corp. p8
Goldman Sachs p4
Good Sheperd Rehabilitation Network p1
Graduate Hospital p1
H
Harmony Living Centers, LLC p8
Harris Williams & Co. p4
Health Management Associates p3
Healthcare Acquisition Corp. p16
HealthSouth p8
Henry Ford Health System p2
HSBC Bank p9
Hythiam p4
I
IntraLase p9
Investor AB p9
J
J.E. Robert Cos. p8
JER Partners p8
Jiate Excelsior p7
JP Morgan Securities, Inc. p9
K
Kodak p9
L
Lehman Brothers p9
L’Oreal p16
M
Martindale p9
Mary Immaculate Hospital p2
MDS p10
Medtronic p10
Merck KGaA p16
Merrill Lynch Japan Securities p16
Mistubishi Pharma Corp. p16
Mitsubishi Chemical Holding p16
Molecular Devices Corp. p10
Molnlycke Health Care Group p1
Moog p10
Morgan Stanley Bank International p9
Morgan Stanley Principal Investments p9
MPM Capital p16
Municipal Hospital Authority p2
N
National Home Health Care Corp. p4
Navigant Consulting p2
Nomura Securities p16
Novartis p16
Novo Nordisk A/S p14
O
Onex p9
OrbiMed p16
P
Palatin Technologies p15
Passaic Beth Israel p2
PBI Regional Medical Center p2
PCS Health Systems p8
Permira p16
Pharmaceutical Technologies and Services p9
PharmAthene p16
Pinnacle Easy Care p9
PrairieStone Pharmacy p9
Premier Home Health Care Services p4
Proskauer Rose, LLC p2
Prudential Equity p8
R
Ranbaxy Laboratories p16
RediClinic p15
Regent Medical p9
Revolution LLC p15
RevolutionHealth.com p15
Rite Aid Corp. p8
S
Saint Vincent Catholic Medical Centers p2
Sanderling Ventures p16
Sandoz p16
Sanofi-Aventis p15
Seattle Genetics p10
SEB Merchant Banking p9
Select Medical Corp. p8
Sigma-Tau Group p14
Sigma-Tau Pharmaceuticals p14
SkyePharma PLC p16
SSL International p9
St. John’s Queens Hospital p2
St. Mary Hospital p2
St. Mary’s Hospital p2
St. Vincent’s Staten Island Hospital p2
Sunrise Senior Living REIT p8
T
Tanabe Seiyaku Co. p16
Tenet Healthcare Corp. p1
Teva Pharmaceutical Industries p16
Texas Pacific Group p16
Total p16
Triad Hospitals p16
U
UBS Investment Bank p8
United Surgical Partners International p9
University of Pennsylvania Health System p1
V
Ventas p8
Vision Sciences p10
W
Wakefield Capital Corporation p8
Wal-Mart p15
Walgreens p9
Welsh, Carson, Anderson & Stowe p9
Wilkinson Corporation p8
Wyckoff Heights Medical Center p2
Wyeth p10
X
XTL Biopharmaceuticals p10
Z
ZEVEX International p10
Ziegler Capital Markets Group p8 |
Medical Devices Set Strong Pace - Sector
Leads Robust Consolidation In 2007
Email Editor
The Medical Device sector
posted
a total of 14 deals during January,
representing 17% of the month’s M&A deal volume. However, the sector
attracted a disproportionate share of M&A dollars, $19.3 billion, or 69%
of January’s health care M&A funds. Four transactions were billion-dollar
deals.
In the largest deal of the
month, Abbott (NYSE: ABT) is selling two of its four diagnostic
divisions to GE Healthcare (NYSE: GE) for $8.13 billion. Abbot is
divesting its in vitro diagnostic and point-of-care diagnostic business
divisions, but will retain its molecular diagnostic and diabetes care
units. The in vitro diagnostics unit provides immunoassays and blood
screening for such diseases as HIV, hepatitis, cancer, heart failure and
others; the point-of-care business provides products for blood analysis by
health care professionals at the point of care. This acquisition
strengthens GE Healthcare’s health care technology business. The
transaction is valued at 3.0x revenue.
In the
second-largest deal, private equity firm Apax Partners is selling
Molnlycke Health Care Group, a Swedish device company, to
Investor AB and Morgan Stanley Principal Investments, two
private equity firms for $3.7 billion (€2.85 billion). Molnlycke
management will be minority shareholders. The price to revenue multiple
for this transaction is 3.75x.
Molnlycke
makes wound care and surgical products primarily for the professional
health care sector. Through a series of investments it made in 2004 and
2005, Apax Partners bought and combined the businesses of SSL
International’s wound care business, Regent Medical’s surgical
gloves business and Molnlycke. Apax paid a combined €1.3 billion for all
three.
Other bidders
for Molnlycke in the current transaction included The Blackstone Group
and Clayton, Dubilier & Rice. The current buyers have received a
binding credit commitment for the debt financing arranged by HSBC Bank,
Morgan Stanley Bank International and SEB Merchant Banking.
Following
through on its intention stated in November, Cardinal Health (NYSE:
CAH) is selling its Pharmaceutical Technologies and Services (PTS)
segment, to The Blackstone Group, one very busy private equity firm, for
$3.3 billion in cash, or 1.8x revenue. PTS provides contract
manufacturing, development and packaging services to the pharma and
biotech industries at 30 facilities worldwide. CAH will retain
Martindale and Beckloff Associates, two businesses that support
the generic pharma market. The company plans to use the proceeds from the
sale to accelerate its stock buyback program.
Onex
(TSX: OCX), the Canadian conglomerate, is buying Kodak’s (NYSE: EK)
health group, which is engaged in information technology, molecular
imaging systems, and medical and dental imaging. The price is $2.55
billion, or 1.0x revenue. This divestment supports EK’s decision to
concentrate its strategic focus on consumer and professional images and
the graphic communications industry. Due to tax-loss carryforwards, EK is
expected to retain the vast majority of the cash proceeds from this sale.
Under terms of the deal, $2.35 billion will be paid in cash and as much as
$200.0 million in milestone payments. If OCX realizes an internal rate of
return in excess of 25% on its investment, EK will receive payment equal
to 25% of the excess return, up to $200.0 million.
The next
largest deal brings together two competitors. Advanced Medical Optics
(NYSE: EYE) is paying $808.0 million in cash for IntraLase (NASDAQ:
ILSE), which designs, develops and manufactures ultra-fast laser products
for vision correction. This transaction, valued at 6.6x revenue, gives EYE
its rival’s blade-free technology, helping to establish it as a global
leader in refractive technology. EYE currently holds a 60% market share of
the Lasik vision correction market.
The deal
offers ILSE shareholders a 12.5% premium over the stock’s prior-day
closing price. It had been anticipated because ILSE’s femtosecond laser
technology is becoming the standard of care for creating a corneal flap in
Lasik surgery. UBS Investment Bank and Goldman Sachs provided financial
advice to EYE; Bank of America and JP Morgan provided financial
advice to ILSE.
MDS
(NYSE: MDZ), the life sciences company, is acquiring Molecular Devices
Corp. (NASDAQ: MDCC) for $615.0 million. MDCC provides bioanalytical
measurement systems for drug discovery and other life sciences research.
This transaction, valued at 3.3x revenue, expands MDZ’s global position as
a provider of life science solutions. It also offers MDCC shareholders a
48.7% premium to the stock’s prior-day trading price. The buyer will
create a new business unit that combines MDCC and MDZ's exisiting MDS
Sciex division.
Moog
(NYSE: MOG.A) is acquiring ZEVEX International (NASDAQ: ZVXI) for
$83.8 million in cash. ZVXI distributes pumps and sets that are used to
deliver enteral feeding for hospital, nursing home and patient home use.
This deal, valued at 2.1x revenue, expands Moog’s home health supply
business, annual sales of which are expected to rise to $65.0 million. The
purchase price represents a 36% premium to the average trading price of
the target’s stock over the past 30 days.
Medtronic
(NYSE: MDT) is on the prowl for deals, actively looking outside the United
States. The Asia-Pacific region, particularly Japan and China, seems to
represent its biggest opportunity for foreign markets. Even so, MDT
announced one small domestic deal during January. It is paying up to $41.0
million for certain manufacturing assets for the production of patented
ENT sheath products used in ENT procedures from Massachusetts-based
Vision Sciences (NASDAQ: VSCI). As part of this transaction, MDT now
has the right to distribute, market and sell EndoSheath products on
a worldwide basis. |
|
FREE TRIAL
TO THE
HEALTH CARE M&A INFORMATION SERVICE!
If you like this article, there’s lots more
waiting for you in The Healthcare M&A Information Service. It’s the
bible of what's going on in health care M&A today.
Sign up for two free months right now! There’s no
obligation, no writing “cancel” on a bill. Happy reading!
|
|
