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August 5, 2013 Issue:
Recent Health Care M&A Deals
Hospitals
Acquirer
Target
Price
Community Health Systems, Inc.
Health Management Associates, Inc.
$7.6 billion
Medical Devices
Acquirer
Target
Price
Kinetic Concepts, Inc.
Systagenix
$485 million
Pharmaceuticals
Acquirer
Target
Price
Cubist Pharmaceuticals, Inc.
Trius Therapeutics, Inc.
$707 million
Cubist Pharmaceuticals, Inc.
Optimer Pharmaceuticals, Inc.
$535 million
Actelion Pharmaceuticals Ltd
Ceptaris Therapeutics
$250 million
Services Deal of the Week
Of course we can’t ignore the second largest deal to be announced last week, for-profit hospital giant Community Health Systems’ (NYSE: CYH) acquisition of the troubled Health Management Associates (NYSE: HMA) for $7.6 billion. The price includes the assumption of $3.7 billion of HMA’s debt and CHS stock currently valued at $13.78 per share, based on the closing price on July 29, 2013, as well as $10.50 per share in cash and 0.06942 of a share of CHS common stock for each HMA share. HMA shareholders will own approximately 16% of the shares in the combined company at the close, and may also receive one Contingent Value Right for each HMA share they own for additional cash consideration of up to $1.00 per share, depending on the outcome of certain matters described in HMA’s public filings. If approved, the transaction is expected to close by the end of the first quarter of 2014…..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
July 2013 was the hottest month on record here in the Northeast, and it was also pretty hot for the health care mergers and acquisitions market. The 10 largest deals announced had a combined total of $18.7 billion, while preliminary totals for the month so far are $19.3 billion—and we’re still turning up more deals. Let’s see if the Dog Days of August put an end to this sizzling summer.
Top 10 Health Care M&A Transactions in July 2013
Rank
Acquirer
Target
Price
1
Perrigo Company
Elan Corporation plc
$8,600,000,000
2
Community Health Systems
Health Management Assoc.
$7,600,000,000
3
Pharmstandard OJSC
Bever Pharmaceutical Pte Ltd
$630,000,000
4
Royalty Pharma
Ibrutinib royalty rights
$485,000,000
5
Mitsubishi Tanabe Pharma
Medicago Inc.
$357,000,000
6
Abbott Laboratories
IDEV Technologies, Inc.
$310,000,000
7
Abbott Laboratories
OptiMedica Corporation
$250,000,000
8
Roche Diagnostics
Constitution Medical Investors
$220,000,000
9
Zotec Partners, LLC
Medical Management Professionals, Inc.
$200,000,000
10
Bickford Senior Living
6 senior housing communities
$97,000,000
Source: Irving Levin Associates, Inc., August 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
At last, it’s over. The sale of Elan Corporation plc (NYSE: ELN) to Perrigo Company (NYSE: PRGO) was announced officially on July 29, after months of hostile bids from Royalty Pharma, a few acquisition announcements from Elan that its shareholders voted down, and finally, a formal sales process. Going into the final weekend of July, Mylan Inc. (NYSE: MYL) was rumored to be the highest bidder. But come Monday, Perrigo triumphed with an $8.6 billion offer of cash and stock—that is, $6.25 per share in cash and 0.07636 shares of “New Perrigo” for each Elan share. That put a value of $16.50 per share on Elan’s stock, based on the closing price of Perrigo’s shares on July 26. For the record, Perrigo joins Actavis, Inc. (NYSE: ACT) in acquiring an Irish company (Actavis announced its acquisition of Warner Chilcott plc [NASDAQ: WCRX] in May) and realizing substantial after-tax operating expense and tax savings of more than $150 million….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
With all the initial public offerings popping up in the biotechnology space, it’s getting hard to tell a round of funding from a round of offerings. Take the Series D financing announced last week by San Diego startup aTyr Pharma, which raised $49 million in cash and secured a $10 million debt deal from Silicon Valley Bank to help its first drug candidate for rare immune disorders get into clinical trials. In its first three rounds of financing, aTyr had raised $47 million, bringing its total to $96 million. Although the latest and largest new investor went unnamed, it joined prior investors Alta Partners, Cardinal Partners, Domain Associates and Polaris Venture Partners in the latest round of financing. ..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.
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.
NEW – The Health Care Services Acquisition Report, 19th Edition
Deals have been made. The 2013 Health Care Services Acquisition Report contains private deals in this market that are too small to make it into the financial press. Go to http://www.levinassociates.com/landing/har19order or call 800-248-1668 to order today!
Webcast Calendar…Click here to see more
