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July 22, 2013 Issue:
Recent Health Care M&A Deals
Biotechnology
Acquirer
Target
Price
Mitsubishi Tanabe Pharma
Medicago
$357 million
Ipsen
Syntaxin
$170.3 million
ThermoGenesis, Corp.
TotipotentRx Corporation
$18.6 million
Laboratories, MRI & Dialysis
Acquirer
Target
Price
Source BioScience PLC
Vindon Healthcare PLC
$18.7 million
Medical Devices
Acquirer
Target
Price
Abbott
Optimedica Corporation
$250 million
Abbott
IDEV Technologies
$310 million
Services Deal of the Week
The heat is on, thanks to last week’s announced merger between two New York City health systems. The boards of directors of Mount Sinai Medical Center and Continuum Health Partners unanimously agreed to merge (financial terms undisclosed). The new entity would have more than 3,300 beds at seven campuses throughout Manhattan, Brookyn and Queens, eclipsing the current market leader, NewYork-Presbyterian Hospital, which has 2,600 beds. It would encompass Beth Israel Medical Center in Manhattan, Beth Israel Brooklyn, Mount Sinai Hospital, Mount Sinai Queens, the New York Eye & Ear Infirmary, St. Luke’s Hospital and Roosevelt Hospital. Continuum, which does not have a medical school, sever ties with its present affiliates and turn to the Icahn School of Medicine. As The New York Times noted on July 17th, when big health systems merge, costs go up for health consumers even as the hospitals cite the advantages gained by cost efficiencies. But the Federal Trade Commission has given the merger its blessing, so the transaction is going forward with an expected closing this fall…….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
Health care mergers and acquisitions turned in a decent performance in June 2013, although slightly off the pace of the same month the year before. This June saw a total of 86 deals and a combined deal value of $10.3 billion, which is 4% lower than the 90 deals posted in June 2012, and 27% lower than the $14.2 billion in deal value back then. Granted, not all deals come with disclosed prices, and we may see a few more pop up on our radar from June, but that’s where things stand in mid-July 2013. The top 10 deals announced in June 2013 comprised about 88% of the total, at nearly $9.2 billion. The largest was Tenet Healthcare Corporation’s (NYSE: THC) $4.3 billion acquisition of Vanguard Health Systems, Inc. (NYSE: VHS), bringing together two of the largest for-profit health systems in a deal that is remarkable for the lack of overlap in their respective markets. The second largest deal of the month was announced in Canada, with the $1.2 billion deal by LifeLabs Medical Laboratory Services of Toronto for CML HealthCare Inc. (TSX: CLC), the leading medical diagnostic services provider in Canada. In third place is the $1.0 billion bid by South Africa’s ninth largest generic drug company, Aspen Group (OTC: APNHY), for Merck’s (NUSE: MRK) active pharmaceutical ingredient (API) manufacturing business and the option to acquire a portfolio of 11 branded dosage-form molecules that cover a range of therapeutic treatments.
Top 10 Health Care M&A Transactions in June 2013
Rank
Acquirer
Target
Price
1
Tenet Healthcare Corporation
Vanguard Health Systems, Inc.
$4.3 billion
2
LifeLabs Medical Laboratory
CML HealthCare Inc.
$1.2 billion
3
Aspen Group
Merck’s API business
$1.0 billion
4
Johnson & Johnson
Aragon Pharmaceuticals
$650 million
5
AstraZeneca plc
Pearl Therapeutics Inc.
$560 million
6
Swiss Prime Site AG
Tertianum AG
$530 million
7
Microport Medical BV
OrthoRecon business
$290 million
8
Boston Scientific Corp.
Bard EP
$275 million
9
BioScrip, Inc.
CarePoint Partners Holdings LLC
$223 million
10
RTI Biologics Inc.
Pioneer Surgical Technology
$130 million
Source: Irving Levin Associates, Inc., June 2013
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
Quest Diagnostics Incorporated (NYSE: DGX) has been on a divestiture spree of late. Last week it announced it sold its rights to royalties from commercialization of the drug candidate ibrutinib to Royalty Pharma for $485 million. Considering Royalty’s recent bruising multi-billion-dollar battle for Elan Corporation plc (NYSE: ELN), the purchase price is mere pocket change. For Quest, it is expected to result in after-tax cash proceeds of about $300 million, before associated transaction costs, of course. Quest acquired the royalty rights to ibrutinib as part of its 2011 purchase of Celera. Ibrutinib, an experimental cancer therapy, is now in Phase 3 development by Pharmacyclics (NASDAQ: PCYC) and Janssen Biotech, a subsidiary of Johnson & Johnson (NYSE: JNJ). With developers like those, Royalty Pharma must have felt it couldn’t miss with this offer…..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
NGM Biopharmaceuticals, Inc. of South San Francisco, California, completed a $50 million Series C financing to help advance its portfolio of potential diabetes, obesity and other cardio-metabolic therapeutics. Investors included a few new ones such as the Topspin Fund, as well as existing investors such as The Column Group, Prospect Venture Partners, Rho Ventures and Tichenor Ventures. Since the company’s founding in 2008, it has raised more than $130 million to date, including this Series C round…..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.
Healthcare Facilities Symposium & Expo, October 1 – 3, 2013, Navy Pier, Chicago, IL
Collaborate. Transform. Deliver
The Healthcare Facilities Symposium & Expo is where industry leaders, from design firms to healthcare owners, come together for 3 days to share best practices, explore new concepts and discover products and solutions. The mission of the Symposium is to create a multi-disciplinary environment that inspires you to evoke change and the advancement of a better delivery of healthcare through the physical space. Competitors, clients, and colleagues come together as friends to collaborate, share research, hear fresh perspectives and participate in the ever changing conversation of your industry. Visit www.hcarefacilities.com/LA
Upcoming Interactive M&A Webcast:
Tax-Exempt Entities: Buying, Selling and Valuing
Wednesday, August 7th, 2013, 1:00 pm ET
The not-for-profit merger and acquisition market—specifically not-for-profit health care businesses that acquire other not-for-profit health care businesses—is rapidly and continually evolving. Not-for-profits typically raise capital in different fashions and from different sources than for-profit entities. Find out more from our expert panel: Glenn Fox (Moderator), Partner, Saul Ewing LLP; Charles Bissell, National Practice Leader, Seniors Housing & Health Care Practice, Integra Realty Resources; Joseph Lupica, Chairman, Newpoint Health; Jeff Petty, CEO, Wesley Enhanced Living; William Pomeranz, Managing Director, Cain Brothers.
Go to http://www.levinassociates.com/conferences/1308-online-conference or call 800-248-1668 to register.
Webcast Calendar…Click here to see more
