Health Care Deal News, February 23, 2015 – Where Private Equity Spent its Healthcare Dollars in 2014

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Week ending February 20, 2015:

Recent Health Care M&A Deals

Acquirer

Target

Price

Biotechnology

Sanofi SA

License to small-molecule therapies

N/A

Intrexon Corporation

ActoGeniX

$60 million

Cerecor

Rights to KOR antagonist

N/A

Hospitals

UPMC

Jameson Health System

Merger

Medical Devices

3M Company

Ivera Medical Corp.

N/A

ADCS Still Picking Off Dermatology Practices
Last week, Maitland, Florida-based Advanced Dermatology and Cosmetic Surgery (ADCS) announced its third acquisition in 2015, of a solo dermatology practice in Livonia, Michigan. It follows the previous week’s announcement that Deland Dermatology & Surgery, in Deland, Florida, joined the company, and the January acquisition of Spencer Dermatology Skin Surgery Center in St. Petersburg. No financial terms were disclosed, of course. ADCS now operates a far-flung dermatological empire with more than 100 clinics in Arizona, Colorado, Florida, Georgia, Ohio, Nevada, Michigan, Pennsylvania, South Carolina and Wyoming. We expect some PE firms are ready to put some skin in this game.

Private Equity Targets in 2014
Much has been made over the big deals done in the Pharmaceutical sector in 2014. Not much was made of the $16.8 billion spent by private equity firms or their portfolio companies in the health care arena, perhaps because it only amounts to 4% of the $387 billion total. And the 144 deals announced by PE firms makes up just 11% of the year’s 1,305 total. The most popular targets were Long-Term Care (38), Other Services (28) and eHealth (21). Only 56 deals disclosed a price, so spending is actually much higher than $16.8 billion. We’ll keep digging.

Private Equity Acquisitions in 2014, by Sector

Deals

Dollars

Services

Behavioral Health Care

3

N/A

Home Health & Hospice

10

N/A

Hospitals

4

$545 million

Labs, MRI & Dialysis

3

$4.15 billion

Long-Term Care

38

$4.14 billion

Managed Care

3

N/A

Physician Medical Groups

3

N/A

Rehabilitaion

3

N/A

Other Services

28

$2.5 billion

Services subtotal

95

$11.3 billion

Technology

Biotechnology

4

$789.8 million

eHealth

21

$675.9 million

Medical Devices

17

$3.5 billion

Pharmaceuticals

7

$562 million

Technology subtotal

49

$5.5 billion

Grand total

144

$16.8 billion

Source: The Health Care M&A Information Source, February 20, 2015

Jameson Health System Joins UPMC
A year after signing a nonbinding letter of intent to merge, New Castle, Pennsylvania-based Jameson Health System signed a definitive agreement to merge with Pittsburgh-based UPMC. UPMC already operates more than 20 hospitals, 400 physician offices and outpatient sites, as well as a 2.5 million-member health insurance division. When the letter of intent was signed in September 2014, UPMC said it would invest $70 million to develop Jameson facilities and services over the next 10 years. Of that amount, at least $15 million will be spent on improvements in the next two years.

Cleveland Biotech Lands $30 Million and a New Home
Far from the biotech centers around Boston and San Francisco, ChanRx plugged away at developing a therapeutic drug candidate to treat atrial fibrillation and atrial flutter. Its efforts produced vanoxerine, which shows potential to become a leading pharmaceutical option to rapidly terminate AF in hospital and home settings. Enter investors with Series B financing of $30 million, and voila—ChanRx becomes Laguna Pharmaceuticals, moves its headquarters to La Jolla, California, and gets a new CEO, Bob Baltera, former CEO of Amira Pharmaceuticals. Versant Ventures and Frazier Healthcare led the round, joined by BioMed Ventures and Series A investor Sante Ventures………………Click here for a free trial to The Health Care M&A Information Source and download the current issue today.

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