In the December 2007
issue:
Generic Pharma
Consolidates--
Cross-Border Activity Grows To Access Global Markets
Generic pharma companies announced seven cross-border deals in November.
This activity involved companies based in India, Hungary and Slovenia
looking abroad to expand their market shares.
...
Health Care’s Big Spenders In 2007--
46 Buyers Each Spent $1.0 Billion Or More On M&A
Nearly half of all deals announced and all
dollars committed to the health care M&A market in 2007 have been made by
repeat buyers. Read the issue to see who the most active buyers are, the
sectors they are targeting and their reasons for buying.
...
In the Departments
Services
-Health Care Services
-Deal Summaries
-Additional Transactions
-Transaction Updates
Technology
-Health Care Technology
-Deal Summaries
-Additional Transactions
-Transaction Updates
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Articles Archive
Companies Mentioned in this issue:
December 2007
A
Advanced Healthcare p4
AEW Capital Management p4
Agensys p15
Akrihin p10
Alere p8
Alliance Imaging p3
Amedisys p1
AseraCare p2
Aspen Group p10
Aspen Pharmacare p10
Astellas Pharma p15
AstraZeneca p1
Aurora Health Care p4
B
Beecken Petty O’Keefe p2
Benchmark Assisted Living p3
Bethesda Resources p3
Beverly Enterprises p2
Biogen Idec p15
Boston Scientific p16
C
Capella Healthcare p2
Catholic Health East p3
CB Richard Ellis p4
Celgene Corp. p16
Cellofarm p10
ChristieCare p2
CIGNA, Inc. p4
Co-pharma p10
Cognizant Technology Solutions p15
Community Health Systems p2
Covington Associates, LLC p8
D
Doctor’s Behavioral Health Center p2
Doctor’s Medical Center p2
E
Emeritus Assisted Living p8
Essentia Health p8
Excela Health p3
Excela Health Westmoreland Hospital p3
F
Fiserv p4
FKP, Ltd. p4
Formula Naturelle (Pty.) Ltd. p10
Freeport Financial LLC p2
Fresenius Medical Care & Co. KGaA p16
G
Gedeon Richter p1
Genefar BV p1
Getinge AB p16
GlaxoSmithKline p16
Global Oncolytics p10
GoldenLiving p2
Great-West Life & Annuity p4
Great-Western Healthcare p4
Greater Cincinnati Associated Physicians p4
Guidant p16
Gyrus Group p15
H
HemoSense p16
Home Health Corp. of America p2
I
Inverness Medical Innovations p8
K
Krka, d.d. p10
L
LHC Group p8
M
Macquarie p4
marketRx p15
Maverick Healthcare p2
MCG Capital Corporation and Prospect Capital Corpo p2
Medical Associates Health Centers p4
Merck & Co. p16
Mercy Hospital of Pittsburgh p3
Mercy Jeannette Hospital p3
Mercy Medical Center p2
Merrill Lynch Capital p2
Mexicana p10
N
Neurimmun Therapeutics AG p15
New England Health Enterprises Business Trust p3
New England Imaging Management, LLC p3
North Atlantic Value, LLP p3
O
Oconomowoc Memorial Hospital p4
Olympus Corporation p15
Onco Therapies Ltd. p10
P
Papastavros Associates Medical Imaging p3
ParadigmHealth p8
Pharmion Corp. p16
PHW Group p10
Pittsburgh Life Sciences Greenhouse p16
Pittsburgh Mercy Health System p3
Polpharma p1
Powercliff Ltd. p10
Principal Senior Living Group p4
ProHealth Care p4
ProNova BioPharma p16
Q
QAS p8
R
RadNet p3
ReAble Therapeutics p8
Regeneron Pharmaceuticals p15
Reliant Pharmaceuticals p16
Renal Solutions p16
Resurgence Health Group p3
Rural Hospital Acquisition p3
S
sanofi-aventis p8
Shattuck Hammond p2
Sisters of Charity of Seton Hill p3
Solara p10
Stanislaus Behavioral Health Center p2
Strides Arcolab p10
Strides Latina p10
Sumifarma p10
SunLink Health Systems p3
T
TAD Pharma GmbH p10
TeleCare Corp. p2
Tenet Healthcare Corp. p2
The Blackstone Group p8
The Dakota Clinic/Innovis Health p4
The GPT Group p3
The Halifax Group p2
The Health Alliance of Greater Cincinnati p4
The Kuwait Finance House p3
Tri-Isthmus Group p3
Triad Hospital p2
U
UBS Securities, LLC p8
UnitedHealth Group p4
University of Pittsburgh Medical Center p3
W
Waukesha Memorial Hospital p4 |
Health Care’s Big Spenders In 2007--
46 Buyers Each Spent $1.0 Billion Or More On
M&A
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Email Editor
While
the period from Thanksgiving through New Year’s Day
tends to bring out the shopaholic in us, health care businesses generally
use this time to wrap up deals previously announced because they have been
out shopping throughout the year. And while December will not be without
its share of deals, we can now look back on 2007 to see who the most
prodigious buyers were in the health care industry, what sectors they
targeted and why they pursued their transactions.
From January through the end
of November 2007, a total of 146 buyers announced two or more deals. These
"serial" acquirers account for a total of 441 transactions, or 46% of the
958 deals announced during that period. The combined value of these deals
is $97.7 billion, or 47% of the $206.6 billion spent in that same period.
These acquirers thus account for nearly half of all health care M&A
activity.
Repeat buyers were present
at every level of the market, from AstraZeneca’s (NYSE: AZN) 10
deals for $17.7 billion, to Amedisys’ (NASDAQ: AMED) nine deals for
$107.0 million through to LHC Group’s (NASDAQ: LHCG) five deals for
an estimated $25.0 million. It will come as no surprise to regular readers
of this newsletter that at the high end of the scale, the sectors most
frequently targeted included Biotechnology, Long-Term Care, Medical
Devices and Pharmaceuticals.
The
table on page 9 of the
December issue of The Health Care M&A Monthly ranks the
46 organizations that each committed $1.0 billion or more to M&A activity
during 2007. These 46 announced a combined total of 130 deals worth a
total of $158.4 billion. Fourteen of the buyers were private
organizations; all but one of them were financial buyers such as private
equity firms. And the sole privately-held strategic buyer in the list,
ReAble Therapeutics with three deals, is strongly backed by The
Blackstone Group, a well-known private equity shop. The private cohort
was responsible for just 17 deals worth a total of $37.7 billion.
Accordingly, the majority of buyers, in terms of both deal and dollar
volume, are strategic buyers.
While the financial buyers
acquire companies to make them more productive, then resell them at higher
valuations and turn a profit, the strategic buyers have a variety of
additional motivations for deal making. Big pharma has been using M&A as a
form of R&D; instead of developing new products in-house, they are buying
biotechs with promising late-stage drug candidates. Globally, the industry
has also been using deals as a way to enter new markets rather than
establish de novo outposts in countries where they have not historically
been present. A number of the big pharma companies are also in search of
replacements for their blockbuster drugs threatened with near-term patent
expiration. For example, sanofi-aventis (NYSE: SNY), faced with
generic competition for drugs representing 50% of its revenue, was highly
motivated to undertake five deals in the biotech and pharma sectors this
past year. Some companies, such as Emeritus Assisted Living (AMEX:
ESC) and ReAble Therapeutics, were seeking economies of scale by
consolidating smaller, complementary businesses in the seniors housing and
orthopedics spaces, respectively. Among the health care services
providers, no matter their size, transactions were often undertaken to
establish a more dominant market position. Community Health Systems, for
example, used deal making to become the largest publicly traded hospital
company in the country, while home health provider Amedisys’ nine deals
extended its provider network, making itself more attractive to big
multistate clients. The current fragmentation in various provider sectors
guarantees that robust consolidation of this sort will continue into next
year and beyond.
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