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October 13, 2014 Issue:
Recent Health Care M&A Deals
Evenspring’s health division
MD On-Line, Inc.
Michael J. Hennessy
CURE Media Group
Daughters of Charity Health System
Carondelet Health hospitals
Carolina Pines Regional
ABILITY Network Buys MD On-Line
Last year we saw a dip in interest in eHealth companies, as deal making slowed considerably. This year, big data and the analytic muscle needed to make sense of it all has revived investors’ interest in this sector. For example, last April Summit Partners, the Boston-based private equity firm that focuses on growth-stage companies, paid $550 million in cash and debt for ABILITY Network, a healthcare IT company with a suite of workflow tools and thousands of clients across hospitals, home care agencies, hospices, skilled nursing facilities, DME and other providers. Last week, ABILITY turned around and paid an undisclosed amount for MD On-Line, Inc., another IT company connecting physician practices and payers. The deal creates a true, data-driven continuum of care for ABILITY. Evercore served as exclusive financial advisor to MD On-Line.
Long-Term Care Sector Spending Up 200% in Q3:14
In the next two weeks, M&A activity in the Long-Term Care sector will surpass the total number of deals announced in 2013. And that was a record year for the sector, ending with 225 announced transactions. As of October 7, we have 213 deals on the books, and still have the rest of the fourth quarter to go. Spending is hot and heavy, too, as you can see from the chart below. Quarter-over-quarter, Q3:14 spending hit $9.6 billion, up 200% compared with the same quarter the year before. With $20 billion and counting for an annual total, the Long-Term Care sector is poised for a blowout year. Hang on to your hats.
Long-Term Care M&A Spending,* by Quarter, 2013 and 2014
Total (so far)
*=in millions. Source: The Health Care M&A Information Source, October 10, 2014
UK Sterilization Company Goes for $1.9 Billion
The Ebola epidemic has driven a lot of speculation in startups and clinical-stage companies with potential drug candidates, among other industries. Last week came word of the $1.9 billion acquisition of Synergy Health plc, a UK company that provides outsourced sterilization services for medical device manufactures, hospitals and other industries. The buyer was Ohio-based STERIS Corp. (NYSE: STE), maker of infection prevention, contamination control, microbial reduction and procedural support products and services. The transaction is expected to result in in total annual pre-tax cost savings of $30 million or more. And despite AbbVie’s (NYSE: ABBV) reversal on its $54.7 billion takeover of Shire (NASDAQ: SHPG) thanks to the US Treasury’s kibosh on inversions, STERIS plans to incorporate in the UK, where its effective tax rate is expected to be 25%. Lazard acted as STE’s financial advisor, so you might want to ask them how that inversion magic still works these days.
Series F Round Brings $120 Million for Invitae Corporation
Invitae Corporation, a genetic information company based in San Francisco, completed a $120 million Series F round, with the proceeds going to accelerate the build-out of its infrastructure for its genetic information business, as well as to expand its global presence. New investors participating in the round included The Broe Group, Decheng Capital, Deerfield Management LLC, OrbiMed, Perceptive Advisors, Rock Springs Capital and Wellington Management Company, LLP, among others. Exisiting investors participating in the financing included Casdin Capital, Genesys Capital, Genomic Health Inc., Randy Scott, Redmile Group and Thomas McNerney & Partners, among others. JP Morgan Securities LLC acted as sole placement agent on the financing……..Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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