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Week ending May 15, 2015:
Recent Healthcare M&A Deals
Biotechnology
Acquirer
Target
Price
Ligand Pharmaceuticals, Inc.
Portfolio of biologics
$4 million
Transition Therapeutics Inc.
License to small molecule
drug candidate
$1 million
Juno Therapeutics Inc.
Stage Cell Therapeutics GmbH
$59 million
Eli Lilly and Company
Collaboration with BioNTech
$60 million
MEDNAX Moves into New Territory
Last week MEDNAX, Inc. (NYSE: MD), which now brands itself as a national medical company, has kept a steady focus on its Pediatrix Medical Group and American Anesthesiology divisions for years. But last week marked its foray into radiology and telemedicine, with the $500 million acquisition of Virtual Radiologic Corporation (vRad). The deal adds a network of 350 radiologists, more than 75% percent of whom are subspecialty trained. They read and interpret more than five million diagnostic imaging studies annually, which are archived in vRad’s proprietary picture archive and communication system (PACS). MEDNAX gains radiology coverage in more than 2,100 healthcare facilities across all 50 states, and international markets. vRad’s current management team will remain with the company as part of MEDNAX, and don’t be surprised if more radiology groups come under their wing.
Behavioral Health Deals in 2015
The behavioral health sector got a slight bump in April, when the CMS proposed that inpatient psychiatric facilities receive a 1.6% rate increase from Medicare in fiscal 2016. Quality metrics are also part of the proposal, and will affect psychiatric facility payments beginning in fiscal 2018. M&A activity in this sector is always very light, but the 11 transactions we’ve recorded in 2015 are slightly ahead of the same period in 2014. And the totals for the 2015 deals, at nearly $129 million, is strong for this sector.
Top 5 Behavioral Health Care Deals, through May 13
Rank
Acquirer
Target
Price
1
Acadia Healthcare Co.
Quality Addiction Management
$53 million
2
AAC Holdings, Inc.
The Oxford Centre, Inc.
$35 million
3
AAC Holdings, Inc.
Hospital facility in California
$13.5 million
4
Investment group
Avancer Homes
$10.7 million
5
GreeneStone Healthcare
Muskoka Treatment Center
$8.1 million
Source: The Health Care M&A Information Source, May 13, 2015
Baxalta’s Predecessor Readies for the Spin Off
Baxter BioScience recently agreed to pay $900 million for the Oncaspar® product portfolio owned the Italian biopharma company, Sigma Tau Financiaria SpA. Oncaspar is a biologic used as part of a multi-agent chemotherapy regimen to treat lymphoblastic leukemia, and is marketed in the United States, Germany, Poland and certain other countries. In addition to the drug, Baxter BioScience also acquired another investigational biologic and an established oncology infrastructure with annual sales of approximately $100 million. Very soon, Baxter International Inc. (NYSE: BAX) plans to spin off Baxter BioScience into a new company called Baxalta Incorporated. This deal is a nice going-away present, for sure.
American Addiction Centers Keeps Growing
Acadia Healthcare Company (NASDAQ: ACHC), a serial acquirer in the behavioral health care space, is getting some competition. American Addiction Centers, a subsidiary of AAC Holdings, Inc. (NYSE: AAC) announced its sixth acquisition in 2015, following its IPO in October 2014. The most recent acquisition was for The Oxford Centre, Inc., a 76-bed residential facility in Tupelo, Mississippi, for $35 million. According AAC, the center generated revenue of approximately $12.2 million and adjusted EBITDA of approximately $5.6 million for the year ended December 31, 2014. So far this year, Acadia Healthcare has announced just one acquisition, but then, it is still digesting some larger acquisitions made in 2014……………………….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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