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April 8, 2013 Issue:
Recent Health Care M&A Deals
Hospitals
Acquirer
Target
Price
Prime Healthcare Inc.
Two Kansas Hospitals
$54.3 million
Medical Devices
Acquirer
Target
Price
Oncologix Tech Inc.
Dotolo Research Corporaation
$4.7 million
Health in Harmony Inc.
Life Care Medical Devices Limited
$8.18 million
Pharmaceuticals
Acquirer
Target
Price
Biocodex USA
Totect
N/A
Dainippon Sumitomo Pharma Co.Ltd
EPI-743 and EPI-589
$35 million
Service Deal of the Week
Two Kansas hospitals owned by Sisters of Charity of Leavenworth Health Service Corp. (SCLHS) have been purchased for $54.3 million by Prime Healthcare Inc. of Ontario, California. Prime offered the best assurance to keep Providence Medical Center, Kansas City, and St. John Hospital, Leavenworth, open and operating for at least five years. The cash sale price fell far short of the $121 million of debt that the SCLHS will continue to absorb after the sale. The two facilities had operating losses of more than $78 million over the last 10 years, during which time SCLHS invested $93 million in capital improvements to the two hospitals….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.
Charted Territory
Deal-making in the health care space slowed considerably in the first quarter of 2013. Of course, last year’s first quarter was very strong, even though M&A activity dropped off through the rest of the year. In this year’s first quarter, there were only three billion-dollar deals, compared with five in the same quarter last year. We’re in the process of gathering our data for our quarterly Health Care M&A Report, and will run the preliminary numbers in the April issue of The Health Care M&A Monthly, due out next week.
Biggest Deals of Q1:2013
Rank
Acquirer
Target
Price
1
Biogen Idec, Inc.
Rights to Tysabri
$3,250,000,000
2
Cardinal Health, Inc.
AssuraMed
$2,070,000,000
3
Mylan, Inc.
Agila Specialties Private Limited
$1,600,000,000
4
Allergan, Inc.
MAP Pharmaceuticals, Inc.
$958,000,000
5
BASF
Pronova BioPharma
$687,456,789
6
TPG
Assisted Living Concepts
$458,540,000
7
Valeant Pharmaceuticals
Obagi Medical Products
$418,320,000
8
Joint venture
The Bristal Portfolio
$370,000,000
9
Argon Medical Devices
Interventional products business
$362,500,000
10
Illumina, Inc.
Verinata Health, Inc.
$350,000,000
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
Skin is in. You may recall a few weeks ago when Obagi Medical Products, Inc. (NASDAQ: OMPI), a specialty pharmaceutical company specializing in prescription-strength skin care systems, agreed to merge with Valeant Pharmaceuticals International, Inc. (NYSE: VRX). At the time of the announcement, Obagi’s board of directors urged shareholders to accept Valeant’s $19.75-per-share offer. Some shareholders immediately sued to stop the deal, feeling their stock was undervalued. Sure enough, last week Merz Pharma Group of Frankfurt, Germany, offered $22 per share, or $385 million, for Obagi. Valeant replied with a $24-per-share offer, more than $418 million, which the Obagi board unanimously approved. Its stock hit $27.37 at the end of the trading day. No doubt there’s more to come……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
It sure would be nice to save time and potentially loads of money before going to clinical trial with a new drug. Hurel Corp., a biotechnology startup in New Brunswick, New Jersey and Beverly Hills, California, has developed a technology platform that it claims does a better job of indicating the effects drugs would have on humans in the pre-clinical phase of development than does testing on animals. The lead product is a technology that replicates the function of a human liver, the organ that best indicates a drug’s toxicity levels in the human body. It raised $9.2 million in Series A funding, led by Spring Mountain Capital through its SMC Select Co-Investment Fund I, LP…….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.
Must-have resources for your healthcare valuation library now available!
Physician compensation… private practice value drivers… legislation – the unique factors affecting healthcare entity finance and valuation are abundant and certainly in the spotlight in the current political environment. Business Valuation Resources, LLC (BVR) – through a special arrangement with Irving Levin Associates – is pleased to put expert guidance at your fingertips. BVR’s Healthcare Industry Finance and Value Resource Center offers a solution for every challenge in the healthcare industry valuation realm. Whether you’re looking for insight into valuation methodology, case law precedent, compensation analysis or value benchmarking, BVR has the answer for you. Visit the Healthcare Industry Finance and Value Resource Center now to peruse our library. While you’re there, be sure to sign up for the free bi-weekly ezine, the Healthcare Value Wire a quick and easy way to keep up with rapid developments in the complex area of healthcare industry finance and valuation.
Upcoming Interactive M&A Webcast:
Hospitals: Buying, Selling and Valuing
Thursday, April 25, 2013, 1:00 pm ET
The dramatic increase in Hospital M&A activity from 2010 through 2012 accounts for a 25% increase in the number of deals made compared to the prior three-year period. That steep incline in hospital mergers and acquisitions is expected to continue in the coming years. Find out more from our expert panel: David Ertel (Moderator), Chief Financial Officer, Einstein Healthcare Network; Arnie Kimmel, Senior Vice President of Development, Prime Healthcare Services; Monte Dube, Esq., Partner, Proskauer Rose; Stephen Gelineau, Senior Vice President, The Camden Group; and Jim Moloney, Managing Director / Co-Head of Tax-Exempt M&A, Cain Brothers.
Go to http://www.levinassociates.com/conferences/1304b-online-conference or call 800-248-1668 to register.
Conference Calendar…Click here to see more
