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May 12, 2014 Issue:
Recent Health Care M&A Deals
Medical Devices
Acquirer
Target
Price
Z-Medica
Rights to hemostatic product
N/A
Alliqua, Inc.
Choice Therapeutics, Inc.
$4 million
Medela
Enteral feeding assets
N/A
Boston Scientific
IoGyn, Inc.
$65 million
Pharmaceuticals
FORMA Therapeutics
Covalent chemistry platform
N/A
Bayer
Merck’s consumer care business
$14.2 billion
H. Lundbeck A/S
Chelsea Therapeutics
$658 million
Physician Medical Groups
MEDNAX
Anesthesia and Pain Management
Group, LLC
N/A
Technology Deal of the Week
The pharma deals kept coming last week, as Bayer AG (XE: BAYN) acquired Merck & Co.’s (NYSE: MRK) over-the-counter consumer care business for $14.2 billion. The deal gets Bayer into the world’s second largest OTC market, with brands such as Claritan, Coppertone and Dr. Scholl’s. The agreement also includes Clartian and Afrin in countries where they are still prescription drugs. The acquisition is expected to yield an immediate positive contribution of 2% to core earnings per share in the first year after closing, which is expected in the second half 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
April wasn’t awful, as far as health care deals went. There were 73 deals announced last month, compared with 78 in March. These data are preliminary, of course, so the month may actually look stronger when we publish the Q2 numbers. The big difference, as we noted in the May issue of Health Care M&A News, was the 1040% increase in deal value from month to month, from $4.3 billion in total deal value in March to $48.5 billion in April. Six deals announced last month were for more than $1 billion, including the $13.4 billion offer by Zimmer Holdings (NYSE: ZMH) for Biomet, and the Novartis (NYSE: NVS) and GlaxoSmithKline (NYSE: GSK) swap-fest totaling around $21 billion. With Pfizer’s (NYSE: PFE) $106 billion offer for AstraZeneca (NYSE: AZN) still on the table, the months ahead could yield even higher totals. Hang on, this could be a wild ride.
Deal Volume by Segment and Sector, April vs. March 2014
Apr-14
Mar-14
Deals
Deals
Change
Services
Behavioral Health Care
0
0
0%
Home Health & Hospice
5
3
67%
Hospitals
2
1
100%
Labs, MRI & Dialysis
3
4
-25%
Long-Term Care
9
25
-64%
Managed Care
3
0
300%
Physician Medical Groups
3
5
-40%
Rehabilitation
1
2
-50%
Other
6
8
-25%
Services subtotal
32
48
-33%
Technology
Biotechnology
12
9
33%
eHealth
6
6
0%
Medical Devices
7
4
75%
Pharmaceuticals
16
11
45%
Technology subtotal
41
30
37%
Grand total
73
78
-6%
Source: The Health Care M&A News, May 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
Services Deal of the Week
U.S. Physical Therapy, Inc. (NASDAQ: USPH) is at it again, paying $11 million for a 70% interest in a chain of 13 physical therapy clinics in Houston, Texas. This deal, which closed on May 1, follows USPH’s typical pattern of taking a majority interest rather than full ownership and not identifying the target. On a trailing 12-month basis, USPH generated revenue of $256 million, EBITDA or $43 million and net income of $18 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
Maybe it’s the company’s focus on gastroesophageal reflux disease, or its name, EndoGastric Solutions, that led to the Series G financing round. EndoGastric Solutions announced it had completed raising $30 million from existing investors Advanced Technology Ventures, Canaan Partners, Chicago Growth Partners, De Novo Ventures, Foundation Medical Partners, Oakwood Medical Investors and Radius Ventures. The funding is going to support publishing data from three randomized trials, bringing new products to market, among other things…….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.
ACG Chicago’s 5th Annual Healthcare M&A Conference
The 5th Annual Healthcare M&A Conference on June 17 will bring 300+ professionals together at the Hyatt Regency Chicago. This gathering of corporate & private equity executives, investors, lenders, investment bankers & national experts features a day of thought provoking sessions followed by an ACG Capital Connection reception. Over 50 firms share their experience and expertise, or exhibit. Visit http://www.acgchicago.com/2014healthcaremaconference.aspx for more information and register to join us for this unparalleled access to healthcare M&A.
NEW – The Health Care Services Acquisition Report, 20th Edition – Order Today!
Deals have been made. The 2014 Health Care Services Acquisition Report contains private deals in this market that are frequently too small to make it into the financial press. Order by May 31st and get our FREE white paper “Hospitals: Buying, Selling and Valuing”, plus a complimentary $150 of transactions in our online health care M&A database. Now that’s a deal! Go to http://www.levinassociates.com/landing/har20order or call 800-248-1668 to order today.
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