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September 22, 2014 Issue:
Recent Health Care M&A Deals
Acquirer
Target
Price
Medical Devices
Danaher Corporation
Nobel Biocare Holding AG
$2.2 billion
Biomerics LLC
Access Point Technologies
Merger
Pharmaceuticals
Calico
Rights to UTSW technology
N/A
Akashi Therapeutics Inc.
Rights to DMD treatment
N/A
Recordati
Rights to premature ejaculation drug
$6.5 million
Cognizant Boosts Its Health Care Biz with TriZetto Deal
Last week, IT services giant Cognizant (NASDAQ: CTSH) bet big on the health care industry with its $2.7 billion acquisition of TriZetto Corporation, which specializes in healthcare IT software and solutions. You may recall that, in April 2008, Apax Partners, LP paid $1.4 billion to take TriZetto Group, Inc. (then under the NASDAQ ticker symbol TZIX) private. TriZetto and its 3,700 employees will join Cognizant’s existing healthcare business unit, which counts more than 200 clients, including 16 of the top 20 U.S. health plans and four of the top five pharmacy benefit management companies. Healthcare represents about 26% of Cognizant’s revenue. It’s expecting to realize about $1.5 billion of revenue synergies over the next five years. And, presumably, keeping TriZetto’s clients, too.
Biotechnology Deals Are on a Roll
With all the brouhaha over the mega-deals in the Pharmaceutical category, it’s seems that the Biotech M&A market has been quiet. In fact, it’s been moving along quite well this year, with 84 deals announced through September 18th. Last year’s total deal count was 83 deals, so this sector is on track to do even better by December 31. Spending has been strong, as well, even though the billion-dollar acquisitions haven’t been in the double-digit range. Through Sept. 18th, Biotech deal values hit $18.56 billion, with 45 of the 84 deals reported prices. In the same period last year, Biotech deal value was already $26.5 billion, thanks to Thermo Fisher Scientific’s (NYSE: TMO) $15.1 billion acquisition of Life Technologies (NASDAQ: LIFE) in April 2013. That deal was also the largest announced in 2013. Take that ringer out of the mix, and deal value would have been just $11.3 billion for the same time period. (Biotech ended 2013 with 83 and total spending of $29.6 billion.) We still have the fourth quarter to go, too.
Top 5 Biotechnology Deals thru September 18, 2014
Acquirer
Target
Price
Roche
InterMune, Inc.
$8.3 billion
GlaxoSmithKline plc
Novartis global vaccine business
$5.25 billion
GE Healthcare
Assets from Thermo Fisher
$1.06 billion
Sterigenics International
Nordion Inc.
$758 million
Genentech, Inc.
Seragon Pharmaceuticals, Inc.
$725 million
Source: The Health Care M&A Information Source, September 18, 2014
Welsh, Carson Releases Matrix Medical Network
Providence Service Corporation (NASDAQ: PRSC) got into the home health care business with its $400 million acquisition of Matrix Medical Newtork (aka CCHN Group Holdings, Inc.), which provides in-home health assessment and care management services. Matrix Medical operates in 33 states, through a national network of nurse practicitioners serving Medicare Advantage members. It is a portfolio company of Welsh, Carson, Anderson & Stowe XI, LP. The price includes $360 million in cash and 946,722 shares of Providence common stock with a value of $40 million as of the close of trading on Sept. 17, 2014. Welsh, Carson will hold a majority of the shares.
Endo’s Bid for Auxilium Isn’t an Inversion
The big pharma deals keep coming. This one, for once, isn’t all about a U.S. company moving abroad, because the would-be acquirer already did that. Endo International plc (TSX: ENL), formerly of the United States and now domiciled in Dublin, Ireland, made an unsolicited bid for Auxilium Pharmacetuicals, Inc. (NASDAQ: AUXL). The $2.2 billion total price represents an offer of $28.10 in cash and stock, a 31% premium to Auxilium’s closing price on September 16, 2014. Auxilium, a specialty biopharma based in Chesterbrook, Pennsylvania, has been a busy acquirer in its own right. In June it executed a reverse takeover of QLT, Inc. (NASDAQ: QLTI) for $342 million, and paid $585 million for Actient Pharmaceuticals, LLC in April 2013. We’ll see how AUXL’s board plays its hand….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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