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Week ending July 3, 2015:
Recent Healthcare M&A Deals
Managed Care
Acquirer
Target
Price
Maestro Health
Group Health Associates
N/A
GENEX Services
Integrated Care Management
N/A
Centene Corp.
Health Net Inc.
$6.8 billion
Aetna
Humana
$37 billion
Centene Snares Health Net for $6.8 Billion
And so it begins. The managed care merry-go-round picked up speed last week as Centene Corporation (NYSE: CNC) announced it would pay approximately $6.8 billion (including $500 million of debt) to acquire a smaller rival, Health Net, Inc. (NYSE: HNT). A day later, Aetna (NYSE: AET) and Humana (NYSE: HUM) agreed to a deal priced at $37 billion, including debt. That leaves Anthem Inc. (NYSE: ANTM) in pursuit of Cigna (NYSE: CI), which had turned down its latest offer of $47.5 billion the week before. All eyes are now on Molina Healthcare (NYSE: MOH) and WellCare Health Plans (NYSE: WCG), waiting to see if they are targets, or merger partners. Or both.
Second Quarter Health Care M&A Spending Tanks
It’s still early yet, but we can say with confidence that the second quarter of 2015 doesn’t hold a candle to last year’s second quarter, at least dollar-wise. Last year, deal volume and value hit all-time highs for all previous Q2s, coming in at 325 deals and $135.8 billion in spending on those deals. This year, deal volume was fairly steady at 312 (remember, these are preliminary figures for Q2:15) but deal value plummeted 60% to $54.2 billion. We’ll have more details in the July issue of Health Care M&A News, but in the meantime, here are the biggest deals of Q2:15.
Top Five Deals in Q2:15
Acquirer
Target
Price
CVS Health
Omnicare Inc.
$12.7 billion
Alexion
Synageva BioPharma
$8.4 billion
Endo International
Par Pharmaceutical
$8.05 billion
Allergan Inc.
Kythera Biopharmaceuticals
$2.1 billion
Hill-Rom Holdings
Welch Allyn, Inc.
$2.05 billion
Source: The Health Care M&A Information Source, July 6, 2015
Juno Therapeutics Teams up with Celgene
Celgene Corporation (NASDAQ: CELG) made a big bet on a small company last week, when it agreed to pay nearly $1 billion to Juno Therapeutics (NASDAQ: JUNO) for a 10-year collaboration on immunotherapies targeting cancer and autoimmune diseases. The real price is $999,803,496 and consists of an upfront payment of $150 million, and the purchase of 9.1 million shares of JUNO common stock at a price of $93.00 per share. That’s a pretty generous offer, considering Juno’s stock price was bumping along around $54.00 late last week. Juno will be responsible for research and development in North America, and retains commercialization rights there. Celgene will be responsible for development and commercialization in the rest of the world, and will pay Juno a royalty on sales in those areas.
Madison Dearborn Buys into Rehab Products
Chicago-based private equity firm Madison Dearborn Partners plunked down $715 million for Patterson Medical, a division of Patterson Companies (NASDAQ: PDCO). The parent company wants to focus on its dental and animal health businesses, and was looking for a buyer. Patterson Medical provides rehabilitation, assistive and splinting products around the world, which is clearly not great fit. Price-to-EBITDA was a mere 1.06x. ………………………….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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