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Week ending June 25, 2015:
Recent Healthcare M&A Deals
Medical Devices
Acquirer
Target
Price
MELA Sciences, Inc.
XTRAC and VTRAC businesses
$42.5 million
Smith & Nephew plc
Zimmer’s Unicondylar Knee system
N/A
DJO Global, Inc.
Biomet Cobalt™ Bone Cement
N/A
Other Services
Thermo Fisher Scientific Inc.
Alfa Aesar
$405 million
Bolder Healthcare Solutions
Avectus Healthcare Solutions
N/A
Zimmer-Biomet Merger Spurs More Deals
After more than a year of regulatory reviews in the United States and Europe, Warsaw, Indiana-based Zimmer Holdings (NYSE: ZMH) and its cross-town rival Biomet, Inc., finally tied the knot on June 24, 2015. In April 2014, when the deal was first announced, the price was put at $13.35 billion. At closing, management stated that the value of the deal was approximately $14 billion. The combined company will be known as Zimmer Biomet Holdings, Inc., and will trade on the NYSE and SIX under the ticker symbol ZBH. The acquisition was conditioned upon the sale of some Zimmer and Biomet assets, and hot on the heels of the closing, Smith & Nephew (NYSE: SNN) acquired Zimmer’s Unicompartmental High Flex Knee system in the U.S. market, and privately held DJO Global, Inc. purchased Biomet’s Cobalt™ Bone Cement, Optivac® Cement Mixing accessories and Discovery® Elbow System for the U.S. market. Terms of those deals were not disclosed.
Top Deals in June 2015 Aren’t So Big
Healthcare M&A in June 2015 hasn’t been dead slow, but it certainly hasn’t kept pace with previous months’ totals. With 83 deals and $14.8 billion in spending, June 2015 lags far behind June 2014’s 120 transactions and $59.2 billion in spending. That said, we’re writing this on the day the U.S. Supreme Court found for the defendant (the Obama administration) in King v. Burwell, which means there could be a few very large deals announced between now and next week—particularly in the managed care sector, where the Big Five health insurers have already made plans to consolidate into the Big Three (see last week’s story in Health Care Deal News). For now, here are the five biggest deals announced in June 2015. This is by no means the final word.
Top Five Deals in June 2015
Acquirer
Target
Price
Allergan plc
Kythera Biopharmaceuticals
$2.1 billion
Hill-Rom Holdings, Inc.
welch Allyn, Inc.
$2.05 billion
CVS Health Corp.
Target’s pharmacy business
$1.9 billion
OPKO Health, INc.
Bio-Reference Laboratories
$1.47 billion
Panasonic Healthcare
Bayer’s diabetes care business
$1.15 billion
Source: The Health Care M&A Information Source, June 25, 2015
Sabra Buys the NMS Portfolio
Sabra Health Care REIT (NASDAQ: SBRA) plunked down $234 million for four skilled nursing facilities, known as the “NMS Portfolio,” all located in Maryland. The four skilled nursing facilities, with a combined total of 678 beds, specialize in transitional care and medically complex post-surgical, ventilator and dialysis patients. Sabra will enter into a triple-net master lease agreement with the current operator on three of the facilities and a triple-net lease agreement on the fourth, which is encumbered by a HUD loan. They will have an initial term of 15 years, two 10-year renewal options and annual rent escalators equal to the great of 2.50% or CPI, but not to exceed 2.75%. Initial yield on cash rent is expected to be 8.75%. Sabra expects to close on three of the facilities by the end of the month, while the fourth will close upon Sabra’s assumption of a $10.8 million HUD loan with an interest rate of 5.6%.
Bolder Healthcare Solutions Makes Two Bolt-on Acquisitions
You probably haven’t heard of Bolder Healthcare Solutions, the Louisville, Kentucky-based partnership formed by The Edgewater Funds, JZ Capital Partners and BHS CEO, Michael Shea. The company offers a suite of healthcare revenue cycle management (RCM) services to hospitals and physician practices. Last week BHS announced two transactions, for two privately held companies, The ROI Companies and Avectus Healthcare Solutions. ROI Companies also provides healthcare RCM services, while Avectus Healthcare specializes in processing third-party liability claims and accounts for hospitals and trauma centers. Not to be boastful, but its press release states that Avectus “utilizes every resource provided by state law, including hospital and medical lien statutes and assessment of benefit protections, to properly process these complex claims.” Somebody’s gotta do it. ………………………….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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