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Week ending February 27, 2015:
Recent Health Care M&A Deals
Acquirer
Target
Price
Biotechnology
Bristol-Myers Squibb
Flexus Biosciences, Inc.
$800 million
Bristol-Myers Squibb
Collaboration with Rigel Pharmaceuticals
$30 million
Bristol-Myers Squibb
Rights to AB-022
N/A
Hospitals
BJC HealthCare
Mineral Area Regional Medical Center
N/A
Medical Devices
Cantel Medical Corp.
MRLB International
$10 million
Medtronic plc
Advanced Uro-Solutions
N/A
Shore Capital Partners
Summit Medical, Inc.
N/A
Cross-Border Merger in Medical Devices
With only four deals announced in January, it seemed as if M&A in the medical devices sector was drying up. Not quite, as 11 announcements surfaced in February. The largest came last week, as Sorin SpA (MIL: SRN) agreed to merge with Houston-based Cyberonics Inc. (NASDAQ: CYBX). The all-stock transaction produces a combined equity value of approximately $2.7 billion. If all goes according to plan, Cyberonics shareholders will own 54% of the new company upon closing, which translates to a purchase price of about $1.24 billion. The new company, still to be named, combines two global leaders in cardiac surgery and neuromodulation, and will be a major player in cardiac rhythm management, especially in Europe and Japan. For more on cross-border M&A, be sure to check out our webinar on March 12, Cross-Border M&A: Opportunities and Issues.
February Posts Big Spending for a Short Month
As of Friday, February 27, the month’s deal count was exactly even with the same month a year ago, at 90 deals, and will probably edge higher by the time you read this. But this February’s M&A spending is at least 5% higher than last year, at $36.3 billion. Here’s a look at the top five deals.
Top Five Health Care Deals in February 2015
Acquirer
Target
Price
Pfizer Inc.
Hospira, Inc.
$17 billion
Valeant Pharmaceuticals
Salix Pharmaceuticals
$10.1 billion
Rite Aid Corporation
EnvisionRx
$2.0 billion
Cyberonics Inc.
Sorin S.p.A.
$1.24 billion
3M Company
Separations media business
$1.0 billion
Source: The Health Care M&A Information Source, February 27, 2015
PE Firms Make Grand Exits in the PBM Sector
After a fairly quiet 2014, M&A in the pharmacy benefit management (PBM) segment saw two big deals go down in February. First, Rite Aid Corp. (NYSE: RAD) paid $2 billion for EnvisionRx, a portfolio company of TPG. Last week, Catamaran Corp. (NASDAQ: CTRX) added to its own portfolio with an all-cash, $405 million deal for Healthcare Solutions, Inc., a portfolio company of Brazos Private Equity Partners LLC. Healthcare Solutions specializes in pharmacy benefits and other services in the workers’ compensation market, making for a strong addition to Catamaran’s previous acquisitions: Restat, LLC, which provides PBM services for self-funded employers, third-party administrators, workers’ comp plans, health plans and unions; and Salveo Specialty Pharmacy, which focuses on several core therapeutic categories: oncology, hepatitis C, HIV/AIDS, organ transplant, rheumatoid arthritis and gastrointestinal diseases.
Kythera Biopharma Goes Bald
Kythera Biopharmaceuticals (NASDAQ: KYTH), a clinical stage biopharma with a penchant for novel prescription products for the aesthetic medical market, entered into separate license agreements with Actellion Pharmceuticals Ltd. and the University of Pennsylvania last month. Actelion is selling the rights to setipiprant, a clinical-stage oral antagonist to the prostaglandin D2 receptor. Under the agreement with UPenn, Kythera acquired exclusive worldwide rights to certain patents covering the use of PGD2 receptor antagonists to treat hair loss. Not a very sexy-sounding way to look sexier, but it just might work……………….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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