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March 4, 2013 Issue:
Recent Health Care M&A Deals
E-Health
Acquirer
Target
Price
Cymetrix
CareClarity, Inc.
N/A
DMH International
Touch Medical Solutions, Inc.
N/A
Medical Devices
Acquirer
Target
Price
C-RAD AB
Cyrpa Medical Security
$1.4 million
Radiometer Medical ApS
HemoCue
$300 million
Pharmaceuticals
Acquirer
Target
Price
Mylan, Inc.
Agila Specialties Private Limited
$1.6 billion
M&A Strategies to Navigate the Changing Landscape in Health Care
The 2nd Annual Leadership Summit on Mergers and Acquisitions in Health Care taking place April 8-10, 2013 in Washington, D.C. provides a unique opportunity to hear from leading industry experts discussing the latest M&A activities and the trends and market opportunities that health care organizations must take full advantage of if they want to maintain market share and increase revenues. Attendees will have the opportunity to interact with health plans and provider groups to hear first hand the challenges they encountered on deals they negotiated and the lessons learned from their experiences. Additionally, attendees will be able to learn from leading private equity firms and investors what sectors within healthcare they are focusing on and why. For more information or to register visit www.worldcongress.com/mergers.
Service Deal of the Week
Do-it-yourself home health care is big business, as in $2.07 billion big. Cardinal Health (NYSE: CAH), the second-largest distributor of prescription drugs in the U.S., saw an opportunity to open a new distribution channel with its acquisition of AssuraMed, a direct-mail order provider of more than 30,000 medical products for chronic disease patients. AssuraMed, owned by private equity firms Clayton, Dubilier & Rice and Goldman Sachs’ GS Capital Partners, had $1 billion in revenue in 2012 and more than one million customers. Cardinal Health had to borrow $1.3 billion to finance the deal, which restricts its financial flexibility and increases its debt burden. But the cost is worth it, apparently, as The Wall Street Journal reported AssuraMed will represent about 1% of Cardinal’s total sales but its profit margins are higher……Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
HCC Best Practices for Proactive Medical Management
March 18-19, 2013 – Sheraton Music City Hotel – Nashville, TN
We are pleased to announce our 4th Annual HCC Best Practices conference. This conference will build on the success of the 2011 and 2012 conferences while providing practical, timely updates to help you continue to evolve your medical management practices with sound HCC coding.
www.opalevents.org/trk/hccb1301.html
Charted Territory
For all the recent attention given to the acquisitions of physician medical groups by hospitals and other providers, most of the big deals in this area occurred earlier in the 2000s. Granted, the recession slowed down deal-making in all areas, especially in 2009 and 2010. But many healthcare industry observers—okay, older healthcare industry observers—will recall the heady 1990s, when these groups were being snapped up by physician practice management companies. We’ll explore the current trends and parallels with the past in the March issue of The Health Care M&A Monthly.
Top 10 Physician Medical Group Deals, 2000 to 2012
Target
Acquirer
Price
Quarter
HealthCare Partners
DaVita, Inc.
$4.2 billion
Q2:2012
U.S. Oncology
Welsh, Caron, Anderson & Stowe
$1.7 billion
Q1:2004
Team Health, Inc.
The Blackstone Group
$1.0 billion
Q4:2005
Continucare, Inc.
Metropolitan Health Networks
$416 million
Q2:2011
EmCare, Inc.
Onex Corp.
$253 million
Q4:2004
Carle Clinic Association
Carle Foundation Hospital
$250 million
Q1:2010
Magella Healthcare
Pediatrix Medical Group
$174 million
Q1:2001
50 Oncology Practices
Original physician owners
$160 million
Q4:2001
Spectrum Healthcare
Team Health, Inc.
$146 million
Q1:2002
Medical Doctor Associates
Cross Country Healthcare
$155 million
Q3:2008
Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today
Technology Deal of the Week
This is more like the deal that undid the company. On February 6, Elan Corporation (NYSE: ELN) sold its interest in the successful MS drug, Tysabri, to its partner in the venture, Biogen Idec (NASDAQ: BIIB), for $3.25 billion. The agreement included royalty payments to Elan of between 18% and 25% on global net sales beginning in 2014. Biogen’s shares rose 2.6%, to $161.40 in midday trading, while Elan’s American depositary shares dipped 8.4% that day, to $9.59. But they rose quickly after CEO Kelly Martin announced on February 18 that shareholders would receive $1 billion from the sale, refinance its approximately $600 million in debt and look for acquisitions to boost its tapped-out pipeline. Enter investment firm Royalty Management LLC and its Royalty Pharma AG, a Swiss stock corporation that acquires royalties and other contractual rights that entitle it to receive a portion of revenue from the sale of biotech and pharma products. Its unsolicited $6.55 billion offer for Elan was ignored until the RP went public with its offer on February 20, asking ELN shareholders to consider its $11 per share offer, a 3.8% premium on the closing price on February 18. Not surprisingly, on February 25, Elan’s Board of Directors replied that Royalty Pharma’s “highly opportunistic timing” made it difficult for Elan shareholders to assess and realize the benefits of the Tysabri deal, which had not yet closed. Stay tuned…..Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
In the Pipeline
Three venture capital deals announced in February caught our eye, if only because each involved treatments for ailing eyes. The biggest round, “up to” $70 million, went to privately held TearScience, Inc. of Morrisville, North Carolina, to commercialize its TearScience system and establish it as the standard of care for evaporative dry eye. The sole backer is HealthCare Royalty Partners, which no doubt saw a promising market. According to TearScience, more than 100 million people worldwide suffer from dry eyes, and 86% of them have evaporative dry eye. Glaukos Corporation scored $30 million in Series F financing to fund the commercial launch of its iStent trabecular mirco-bypass device. The financing was led by Meritech Capital Partners and joined by seven existing investors. PolyActiva pulled in $9.5 million in new funding to advance development of a number of intraocular and other implants to treat glaucoma, severe infections of the eye and an intra-articular product to treat osteoarthritis. The Series B round came from a consortium of investors including the Medical Research Commercialisation Fund, Brandon Biosciences Fund I (both managed by Brandon Capital), Yuuwa Capital and other angel investors….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
Conference Calendar…Click here to see more
