One area that we expect to see increased M&A activity in over the next 12 months is the extremities market.
We have already seen a few deals in the space this year, led by Wright Medical Group, the global speciality orthopaedic company, who acquired US based extremity orthopaedic products manufacturers OrthoPro LLC and Solana Surgical LLC, for €26.6m and €62.6m respectively. Also Stryker Corporation, one of the world’s leading medical technology companies, acquired Small Bone Innovations Inc., a US based manufacturer of upper and lower extremity small bone indications, with a focus on small joint replacement, for €273.9m. The space seems to be attracting attention as other companies have also previously sold for high multiples; demonstrated by Smith & Nephew’s acquisition of Arthocare for 17.8x EBITDA and Zimmer’s potential acquisition of Biomet for 13.2x EBITDA.
It is estimated that the US extremity orthopaedic market is set for strong growth, and is expected to reach $4.2 billion by 2016, which will likely mean increased competition, M&A activity and consolidation of the market as people continue to want to enjoy active lives and do not want to be limited by restrictive movements through wear and tear.
At CWI we believe extremities will continue to be the highest growth area in the orthopaedics space despite some companies reporting pricing pressures. We expect companies who have not yet developed a specialised extremities sales force to build these capabilities over time as market penetration and procedural volumes continue to expand.
Health & Social Care Deals
TPG teamed up with an affiliate of Shanghai Fosun Pharmaceutical and Ms Roberta Lipson to back a management buyout of Chindex International, a US private care hospitals operator, for a consideration of €339.1m.
Montreux Capital Management and Macquarie Lending acquired The Regard Partnership, a learning disabilities business, which provides residential and supported living services to users across over 120 sites in the UK, for a consideration of €151.4m.
US behavioural health facilities specialist Universal Health Services acquired Cygnet Health Care for a consideration of €260.1m. Cygnet is a specialist mental healthcare provider which operates 15 mental health hospitals and two nursing homes across the UK. It provides services for people with autism and eating disorders among other conditions.
idcsalud SL acquired a 50% stake in Instituto Extremeno de Reproduccion Asistida SL (IERA), the Spain based fertility clinic operator that offers test-tube fertilisation services, for an undisclosed consideration. idcsalud S.L. is a Spain based company that provides health and medical care services.
Sovereign Capital, the UK based private equity firm, acquired a majority stake in Willows Veterinary Centre and Referral Service, the UK-based operator of veterinary centres for small animals, for an undisclosed consideration.
Private equity firm CVC Capital Partners acquired France based acute care provider Vedici SaS for a consideration of €107.7m.
ERS Medical Ltd acquired Medical Services (North-East) Ltd, a UK based ambulance transportation firm, for an undisclosed consideration. ERS is a UK based company that provides a range of specialist patient transport and courier services to the NHS and the wider healthcare sector.
Spring Ventures completed the MBO of Creative Care Ltd, a UK based firm that provides residential care for patients with autistic spectrum disorders and other complex needs, for an undisclosed amount.
Specialist care provider Cambian Group acquired Ansel, a UK based clinic for men suffering from personality disorders, for an undisclosed amount.
LHC Group Inc. acquired 13 home health agencies from Life Care Home Health Inc., a US based home health care services company, for €7.6m. Based in the US, LHC is a provider of post-acute healthcare services.
Pharma & Biotech
DPx Holdings BV acquired Gallus BioPharmaceuticals LLC, a US based biopharmaceutical products contract manufacturer, from Ridgemont Equity Partners, for an undisclosed amount. DPx, owned by JLL Partners and Royal DSM, is the umbrella company of DSM Pharmaceutical Products and Patheon Inc. a contract development and manufacturing organisation (CDMO) for the pharmaceutical industry.
Chiltern International Ltd, the UK based contract research organisation, acquired Pacific Clinical Research Pte Ltd, a Singapore based clinical research service company, for an undisclosed amount.
Abbott Investments Luxembourg S.à.r.l. acquired CFR Pharmaceuticals SA, a Chile-based prescription branded speciality medications manufacturer, for a consideration of €2.5bn.
Horizon Pharma Inc. a specialty biopharmaceutical company based in the US, acquired Vidara Therapeutics International Ltd, for a consideration of €474.5m. Vidara is an Ireland based specialty pharmaceuticals manufacturer.
Crawford Healthcare Ltd acquired Touchless Care Concepts LLC, US based manufacturer of spray-on skin protection products manufacturer, for an undisclosed amount. Crawford is a UK based supplier of dermatology and woundcare products.
Medical Equipment & Supplies
Emkado Ltd, the UK provider of surgical sutures and disposable surgical textiles, acquired York Medical Technologies Ltd, for an undisclosed consideration. York Medical is a UK-based medical instrument wholesaler.
LDI Ltd, a US investment company, acquired UltiMed Inc. for an undisclosed amount. UltiMed is a US based insulin syringes, pen needles, and safety syringes manufacturer.
VWR International LLC acquired Klinipath BV and its affiliates Immunologic BV, Mortupath BV and Klinipath BVBA. VWR is a US distributor of research laboratory products. Klinipath is a Netherlands-based pathology equipment, consumables, disposables and reagents manufacturer.
Cynosure Inc. acquired the assets of Ellman International Inc. for a consideration of €10.1m. Cynosure is a US based company that develops laser and light based aesthetic treatments for non-invasive and minimally invasive applications. Ellman manufacturers advanced radiofrequency technology for precision surgical and aesthetic procedures.
Vygon SA acquired Medwin France SASU, a France based feeding pump manufacturer, for an undisclosed amount. Vygon is a France based company that manufactures single-use sterile medical and surgical products.