Healthcare Sector Comment – April 2015

Dato

US companies are looking across the pond to acquire in the UK and since the beginning of the year, a total of six deals involving a US buyer have occurred. The areas of focus have been in residential care, hospital groups and pharma companies.

Reasons behind the US continually looking for acquisition targets in the UK stem from:

  • ObamaCare impacting margins so that US companies are looking to deploy capital outside of domestic borders;
  • US experts in government subsidised care looking to take their expertise into other public healthcare models, such as the UK; and
  • Tax inversion – despite many measures being put in place, the so-called ‘tax inversion’ is still strong with many US companies looking to take advantage of low tax rates.

Clearwater International is seeing inbound interest from both strategic trade buyers and investors that want to access the very active healthcare market in the UK. We have experience in US cross-border deals, including:

  • Advising on the sale of BAC BV, a leading manufacturer of protein purification products, to Life Technologies Corporation, a NASDAQ-listed global biotechnology business;
  • Advising on the sale of Femcare, leaders in female surgical contraception, to Utah Medical Products Inc; and
  • Advising on the sale of DCC’s mobility and rehab products division to Patterson Medical.

 

Health & Social Care Deals

Australian-listed medical diagnostic imaging services company Capitol Health Ltd acquired Fiddan Pty Ltd for a consideration of €43.2m. Fiddan, doing business as Southern Radiology, is an Australian provider of medical imaging services.

Cambian Group plc, the LSE-listed specialist behavioural healthcare services provider, acquired By the Bridge Ltd, the UK-based foster care services provider, for a consideration of €59.9m. Cambian also acquired the specialist care facility of Turning Point in Mastin Moor (UK) for an undisclosed consideration. The healthcare facility provides beds for 28 adults with personality disorders and mental health needs.

Tenet Healthcare, a US operator of acute care hospitals and related healthcare facilities, acquired private hospital operator Aspen Healthcare for a consideration of €196.6m. Aspen owns and operates eight hospitals and healthcare centres in the UK.

UK healthcare property investment firm Octopus Healthcare acquired two care homes from the CarePlaces Fund for a consideration of €28.3m.

Oasis Healthcare Ltd, the operator of a network of dental practices in the UK, acquired Total Orthodontics Ltd, a UK-based orthodontic dentist clinics operator, for an undisclosed amount.

China-based preventative healthcare solutions provider iKang Healthcare Group acquired a 70% stake in WA Centers HK Ltd, the Hong Kong-based high-end medical services provider, for an undisclosed amount. iKang also acquired Tianjin Hexi Kangmeng Hezhong Clinic Co. Ltd and Tianjin Hedong District REMAHO Clinic Co. Ltd, both China-based medical examination service providers, for a undisclosed amount.

France-based homecare provider Bien à la Maison SAS acquired Domifacile SAS for an undisclosed amount. Domifacile is also a provider of homecare services in France. Concurrently, Bien à la Maison received funding from French private equity firm Turenne Capital Partenaires SA.

Sentage Corporation (trading as Dental Services Group), a US-based operator of dental laboratories, received a majority investment from Cressey & Company LP, the US-based private equity firm.

Lifeways Community Care Ltd, a portfolio company of OMERS Private Equity Inc, acquired Autism Care (UK) Ltd, a UK-based autistic nursing and residential care services provider, from Maria Mallaband Care Group Ltd for an undisclosed amount. Lifeways provides supported living services for people with various complex needs.

 

Pharma & Biotech Deals

Perrigo Company plc acquired Omega Pharma NV, the Belgium-based over-the-counter (OTC) pharmaceuticals manufacturer, for a consideration of €3.7bn. Based in Ireland, Perrigo manufactures and distributes OTC and generic prescription (Rx) pharmaceuticals, nutritional products and active pharmaceutical ingredients (API).

Italian private equity firm Wise SGR SpA acquired NTC srl, an Italy-based pharmaceutical research and development company, in an institutional buy out for a consideration of €15m.

Sun Pharmaceutical Industries Ltd acquired Ranbaxy Laboratories Ltd, an India-based pharmaceutical and drugs developer, for a consideration of €3bn. Based in India, Sun Pharmaceuticals manufactures and markets pharmaceutical formulations and active pharmaceutical ingredients.

Janssen Pharmaceuticals Inc acquired XO1 Ltd, a UK-based anticoagulation biopharmaceutical drugs development firm, from Index Ventures for an undisclosed amount. Janssen Pharmaceuticals is a US manufacturer of prescription pharmaceutical products.

Intas Pharmaceuticals Ltd, through its subsidiary Accord Healthcare Ltd, acquired the hospital business of Combino Pharm SL, the Spain-based pharmaceutical wholesaler, for an undisclosed amount. Intas Pharmaceuticals is an India-based manufacturer of pharmaceutical formulations.

Global pharmaceutical company Actavis plc acquired Allergan Inc, a US-based pharmaceuticals manufacturer, for a consideration of €55.2bn. Actavis manufactures branded pharmaceuticals, generic and over-the-counter medicines, and biologic products.

US-based clinical-stage biopharmaceutical company Kite Pharma Inc acquired T-Cell Factory BV, a Netherlands-based CAR and TCR gene therapy biotechnology researcher and developer, for a consideration of €262.5m.

Impax Laboratories Inc, a speciality pharmaceutical company based in the US, acquired Tower Holdings Inc and Lineage Therapeutics Inc, both US-based pharmaceutical preparations manufacturers, from RoundTable Healthcare Partners for a consideration of €551.4m.

NYSE-listed Baxter International Inc acquired SuppreMol GmbH, the Germany-based developer of protein therapeutics for the treatment of autoimmune diseases, chronic inflammatory diseases and allergies, for a consideration of €200m. Baxter is a healthcare company that primarily focuses on developing products for people with haemophilia, immune disorders, infectious diseases, kidney disease, and other chronic and acute medical conditions.

British multinational pharmaceutical company GlaxoSmithKline plc (GSK) and Swiss multinational pharmaceutical company Novartis AG completed their three part deal. GSK sold its oncology products business to Novartis for a reported €15.1bn whilst it bought Novartis’ vaccines business (excluding influenza vaccines) for an initial cash consideration of €5bn. Both companies also pooled their vast collection of consumer products together in a joint venture.

 

Medical Equipment & Supplies Deals

Medtronic plc acquired Sophono Inc – a US-based manufacturer of implantable, bone anchored hearing devices – for an undisclosed amount. Medtronic is a US-based medical device company.

Sivantos Group, a portfolio company of EQT Partners, acquired audibene GmbH, a Germany-based online hearing aid retail services provider, from Acton Capital Partners GmbH for an undisclosed amount. Sivantos is a Germany-based producer of hearing aids and accessories.

Lifco AB acquired Topdental (Products) Ltd, the UK provider of dental consumables for dental practices, for an undisclosed amount. Sweden-based Lifco is engaged in the dental, demolition and tools, and systems solutions industries.

Mani Inc, the Japan-listed manufacturer and distributer of medical devices and dental instruments, acquired Schutz Dental GmbH, the Germany-based dental equipment manufacturer, for an undisclosed amount.

NYSE-listed medical technology company Becton, Dickinson and Company (BD) acquired CareFusion Corporation, a US-based medical instruments manufacturer, for a consideration of €9.6bn. BD also acquired US-based disposable intravenous infection port device manufacturer CRISI Medical Systems Inc for an undisclosed amount.

H&R Healthcare Ltd acquired CUI International Ltd, a UK-based ostomy and hernia support products manufacturer, for an undisclosed amount. H&R distributes wound management and skin care products in the UK.

US-based diversified technology business 3M Company acquired Ivera Medical Corporation, a US-based infection control products manufacturer, for an undisclosed amount.

Smith & Nephew plc, the UK-based medical device manufacturer, acquired EuroCiencia Colombia SA, a Colombia-based distributer of orthopaedic reconstruction, trauma and sports medicine products, for an undisclosed amount.

Scapa Group plc acquired First Water Ltd, the UK-based wound dressings and skin adhesives manufacturer, for a consideration of €21m. UK-based Scapa manufactures and sells bonding products and adhesive components for applications in the electronics, healthcare, industrial and automotive markets.