Healthcare sector comment: VMS

Increasing numbers of consumers are taking a proactive stance to their personal wellbeing by using vitamins, minerals and supplements (VMS) to improve their health or fitness performance. The global VMS market is expected to grow at a CAGR of 8.8% between 2017 and 2022, reaching almost €200bn. An ageing population, rising incidence of lifestyle-related disease and increasing involvement in the market by male icons are driving this growth.

Consumer appetites are being whetted through the use of high-profile advertising campaigns featuring actors and sportsman to promote brands, such as Vitabiotics recent campaign with David Gandy endorsing their Wellman supplements. Investors are also being enticed by the enlarged consumer appetite and the attractiveness of VMS assets to large food and pharmaceutical companies. Many of the products are also now available in a number of innovative forms including powders, sweets and soups carrying the brand to younger audiences.

In the last couple of months we have seen a number of VMS deals complete globally including:

  • Sanford Ltd acquired Enzaq Aquaculture Ltd, the New Zealand-based muscle powder manufacturer
  • White Bridge Investments acquired a stake in Nutrilinea, the Italy-based producer of food supplements for €70m;
  • Captek Softgel International acquired J+D Laboratories Inc., the US-based provider of dietary supplements and nutraceuticals
  • HGGC, LLC acquired Nutraceutical International Corporation, the US-based manufacturer of nutritional supplements sold to health and natural food stores, for €372m.

At Clearwater International we continue to watch the VMS market as investors and pharmaceutical companies alike make substantial moves into the sector. For an extended commentary please see our Vitamins, Minerals and Supplements Clearthought.


A taste of recent deals

Medical Equipment & Supplies

Novanta Inc., the listed US-based manufacturer of laser systems and precision motion devices acquired W.O.M. World of Medicine GmbH, the Germany-based manufacturer of minimally invasive surgery devices, for €115m.

Apax Partners LLP, the UK-based private equity firm acquired Syneron Medical Ltd., the Israel-based manufacturer and distributer of medical aesthetic devices, for €308m.

Gurnet Point Capital, the US-based private equity firm acquired Innocoll Holdings plc, the UK-based provider of collagen-matrix technologies, for €75m.

Hoya Corporation, the Japan-based supplier of medical products, IT, eye care, lenses and services acquired Performance Optics, LLC, the US-based manufacturer of ophthalmic lenses, for €431m.

Cardinal Health, Inc., the listed US-provider of drug development services acquired Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses of Medtronic, Inc., the listed US-based provider of products and therapies for medical professionals, for €5.7bn.

UltraLinq Healthcare, the US-based group developing connected health products for cardiovascular health acquired Intelesens Limited, the Ireland-based specialist in wearable vital signs monitoring devices.

Halma Plc, the listed UK-based manufacturer of safety, health and environmental technology acquired Cardios Sistemas Comercial e Industrial Ltda., the Brazil-based designer and manufacturer of ambulatory ECG recorders and ambulatory blood pressure monitors, for €15m.

Koninklijke Philips N.V., the listed Netherlands-based health technology company acquired The Spectranetics Corporation, the US-based manufacturer of single-use medical devices used in minimally invasive procedures in the cardiovascular system, for €1.8bn.


Health & Social Care

Teladoc, Inc., the listed US-based provider of telehealth services acquired Best Doctors, Inc., the US-based medical consultation company that provides access to the medical experts and physicians, for €393m.

Apposite Capital LLP, the UK-based private equity firm acquired Swanton Care & Community Limited, the UK-based provider of residential and supported living care for adults with complex learning disabilities and mental health disorders.

Key Capital Partners, the UK-based private equity firm acquired YorkTest Laboratories Limited, the UK-based food intolerance testing company.

HCA Holdings, Inc., the listed US-based owner operator of hospitals acquired Cypress Fairbanks Medical Center Hospital, Houston Northwest Medical Center and Park Plaza Hospital, all US-based medical centres, comprising Tenet Healthcare Corporation’s Houston-area operations, for €665m.

Legal & General Group Plc, the listed UK-based company focused on delivering protection, retirement, solutions, savings and investment management services acquired Inspired Villages Group Limited, the UK-based provider of retirement houses, for €44m.

Aier Eye Hospital Group Co., Ltd., the China-based provider of ophthalmology services acquired an 86.8% stake in Clinica Baviera SA, the Spain-based eye care group, for €147m.

Sabra Health Care REIT, Inc., the listed US-based REIT focusing on the healthcare industry Care Capital Properties, Inc., the US-based healthcare real estate investment trust, for €3.6bn.

Bain Capital, the US-based private equity firm acquired a 54.2% stake in Surgery Partners, Inc., the US-based operator of surgical facilities and provider of ancillary and optical services, for €271m.


Pharmaceuticals & Biotechnology

Fishawack Ltd, the UK-based medical communications agency acquired The Carling Group of Companies, the US-based provider of healthcare marketing and medical education services focused on the pharmaceutical sector.

Graphite Capital Management LLP, the UK-based private equity firm acquired Random42 Digital Healthcare Agency, the UK-based provider of digital solutions to the pharma & biotech industries.

Norgine B.V., the Netherlands-based manufacturer of medicines for gastroenterology, incontinence, hepatology, and pain management acquired Merus Labs International Inc., the Canada-based pharmaceutical company focused on acquiring and optimising legacy and growth products, for €223m.

Zhuhai Hengweichuang Wealth Investment Co., Ltd., the China-based pharmaceutical manufacturer acquired Zhuhai Weixing Industry Co., Ltd., the China-based producer of generic pharmaceuticals, for €598m.

LGC Limited, the UK-based life sciences measurement and testing company acquired Link Technologies Ltd., the UK-based contract manufacturer of specialty products for oligonucleotides.

CSL Limited, the listed Australia-based manufacturer of biopharmaceuticals and allied products acquired an 80% stake in Wuhan Zhongyuan Ruide Biological Product Co., Ltd., the China-based developer and manufacturer of biological and blood products, for €393m.

Evotec AG, the Germany-based drug discovery and development company acquired Aptuit LLC, the US-based provider of contract research, development and manufacturing, for €256m.