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October 20, 2014 Issue:
Recent Health Care M&A Deals
Acquirer
Target
Price
eHealth
Clearview Logix
Evenspring’s health division
N/A
ABILITY Network
MD On-Line, Inc.
N/A
Michael J. Hennessy Associates, Inc.
CURE Media Group
N/A
Nextech Systems
MDIntelleSys
N/A
Hospitals
Prime Healthcare
Daughters of Charity Health System
N/A
Prime Healthcare
Carondelet Health hospitals
N/A
Capella Healthcare
Carolina Pines Regional
Medical Center
N/A
ABILITY Network Buys MD On-Line
Last year we saw a dip in interest in eHealth companies, as deal making slowed considerably. This year, big data and the analytic muscle needed to make sense of it all has revived investors’ interest in this sector. For example, last April Summit Partners, the Boston-based private equity firm that focuses on growth-stage companies, paid $550 million in cash and debt for ABILITY Network, a healthcare IT company with a suite of workflow tools and thousands of clients across hospitals, home care agencies, hospices, skilled nursing facilities, DME and other providers. Last week, ABILITY turned around and paid an undisclosed amount for MD On-Line, Inc., another IT company connecting physician practices and payers. The deal creates a true, data-driven continuum of care for ABILITY. Evercore served as exclusive financial advisor to MD On-Line.
Pharma Deals Still on Track to Beat Record
By now you’ve heard that AbbVie Inc. (NYSE: ABBV) has asked its shareholders to vote against its silly idea to pay $54.7 billion for Shire plc (NASDAQ: SHPG). The deal could actually be dead, or new partners could arrive at the dance. After all, we are in the fourth quarter, and the targets all look prettier in December. Either way, 2014 is on track to post new spending record for the Pharma sector. Looking through our Deal Search Online database, here’s how Rx spending through October 17 stacks up against the previous top four years with the highest spend, even without the ABBV/SHPG deal. Remember, Valeant Pharmaceuticals (NYSE: VRX) is still in pursuit of Allergan (NYSE: AGN), with a $50 billion-plus bid still on the table. Allergan is courting other suitors, but whether they’re targets or acquirers remains to be seen.
Top Five Years for Pharma M&A Spending*
Year
Spending*
Deal Volume
2009
$147.1
138
2014 (YTD)
$124.0
158
2000
$97.4
41
2004
$95.2
171
2006
$77.9
139
*=in millions. Source: The Health Care M&A Information Source, October 17, 2014
UK Sterilization Company Goes for $1.9 Billion
The Ebola epidemic has driven a lot of speculation in startups and clinical-stage companies with potential drug candidates, among other industries. Last week came word of the $1.9 billion acquisition of Synergy Health plc, a UK company that provides outsourced sterilization services for medical device manufactures, hospitals and other industries. The buyer was Ohio-based STERIS Corp. (NYSE: STE), maker of infection prevention, contamination control, microbial reduction and procedural support products and services. The transaction is expected to result in in total annual pre-tax cost savings of $30 million or more. And despite AbbVie’s (NYSE: ABBV) reversal on its $54.7 billion takeover of Shire (NASDAQ: SHPG) thanks to the US Treasury’s kibosh on inversions, STERIS plans to incorporate in the UK, where its effective tax rate is expected to be 25%. Lazard acted as STE’s financial advisor, so you might want to ask them how that inversion magic still works these days.
Series F Round Brings $120 Million for Invitae Corporation
Invitae Corporation, a genetic information company based in San Francisco, completed a $120 million Series F round, with the proceeds going to accelerate the build-out of its infrastructure for its genetic information business, as well as to expand its global presence. New investors participating in the round included The Broe Group, Decheng Capital, Deerfield Management LLC, OrbiMed, Perceptive Advisors, Rock Springs Capital and Wellington Management Company, LLP, among others. Exisiting investors participating in the financing included Casdin Capital, Genesys Capital, Genomic Health Inc., Randy Scott, Redmile Group and Thomas McNerney & Partners, among others. JP Morgan Securities LLC acted as sole placement agent on the financing……..Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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