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September 23, 2013 Issue:
Recent Health Care M&A Deals
Hospitals
Acquirer
Target
Price
Fresenius SE & Co. KGaA
43 Hospitals
$4.1 billion
Providence Health & Services
Saint John’s Health Center
N/A
Houston Methodist
CHRISTUS St. Catherine & CHRISTUS St. John
N/A
Medical Devices
Acquirer
Target
Price
Golden Equity Investments
Innovative Medical Device Solutions
N/A
Pharmaceuticals
Acquirer
Target
Price
Cellceutix
PolyMedix Assets
N/A
Chiesi Farmaceutici
Cornerstone Therapeutics
$251.75 million
Technology Deal of the Week
It was a quiet week for deal making on the Technology side of health care. No billion-dollar bids, no hostile takeovers, no drama. Just a nice offer of $9.50 per share for 100% ownership of Cornerstone Therapeutics Inc. (NASDAQ: CTRX), made by the Italian pharma company, Chiesi Farmaceutici S.p.A. The price works out to a total of $251.7 million for the 42% of Cornerstone shares that Chiesi doesn’t already own, and comes to approximately 78% over Cornerstone’s closing price of $5.35 on February 15, 2013, the last trading day prior to Chiesi’s initial written proposal. Jefferies International Limited is serving as financial advisor to Chiesi, and Morgan, Lewis & Bockius is its legal advisor on the deal. Lazard is serving as financial advisor to Cornerstone, and Clifford Chance is its legal advisor……Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
Charted Territory
The usually quiet Rehabilitation sector got a jolt last week, as Senior Housing Properties Trust (NYSE: SNH) announced the sale of two rehabilitation hospitals to a joint venture comprised of affiliates of The Sanders Trust, LLC and Harrison Street Real Estate Capital, LLC for $90 million. That’s a good chunk of change for this sector, in which the deals are typically private and local. So far this year, only eight transactions have been made public, and this deal is just the second to include a price. Data gathered in the previous five years seem to depict a roller coaster ride in both deal volume and deal values, with the highest number of deals announced – 27 in 2008 – accompanied by one of the lowest combined totals in the five-year period, just $43 million. And the $1.3 billion total turned in in 2011 was the result of a single deal, Kindred Healthcare’s (NYSE: KND) acquisition of RehabCare Group, Inc. (NYSE: RHB). Which just goes to show, you can’t judge a sector by its deal values.
Mergers and Acquisitions in the Rehabilitation Sector, 2008 to 2012
2012
2011
2010
2009
2008
Deal volume
18
9
12
11
27
% change, y-o-y
100%
-25%
9%
-59%
69%
Deal value (millions)
$750
$1,318
$237
$22
$43
% change, y-o-y
-43%
457%
973%
-49%
-90%
Source: Irving Levin Associates, Inc., September 20, 2013
Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today
Services Deal of the Week
It’s back on. German hospital system Rhoen-Klinikum AG (OTCBB: RKAGY) announced once again that it will sell most of its hospitals to rival Fresenius SE & Co. KGaA (NYSE: FMS), this time for $4.1 billion. Some readers may recall a similar announcement was made in Q2:12, when Fresenius offered $3.9 billion for all 53 hospitals (16,000 beds) and 39 healthcare centers in Germany. The deal was scuttled when privately held hospital system Asklepios acquired enough shares in Rhoen to kill the transaction. This time around, just 43 hospitals and 15 outpatient centers are part of the deal, representing about two-thirds of Rhoen’s revenues. Rhoen will hold on to its specialized clinics and university teaching hospitals……Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
In the Pipeline
Nanosphere, Inc., (NASDAQ: NSPH), the molecular diagnostics company with the Mork-ish name, closed its previously announced public offering of 17,250,000 shares of its common stock at the molecular price of $1.75 per share. Piper Jaffray & Co. acted as the sole book-running manager and Canaccord Genuity Inc. and Cowen and Company, LLC acted as co-managers for the offering. Net proceeds from the sale, minus the usual underwriting discounts and commissions, are expected to be around $27.7 million, which is already earmarked for “general corporate purposes and working capital.” Nano, nano….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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