Healthcare Sector Comment – January 2017

As a new year rolls in and people adopt resolutions to be healthier and exercise more, vitamins, minerals and supplements (VMS) are flying off the shelves. Driven by increased take-up of sport and growing demand for natural ingredients, the market is expected to grow at almost 6% over the next three years.

In the last month alone we saw the following transactions complete in the sector:

  • Primavera Capital Group and SIIC Medical Science & Technology Group Ltd. acquired Vitaco Holdings Ltd, the Australian health and wellness supplement manufacturer, for €215m; and
  • Tibet Dingxin Electronic Technology Co., Ltd acquired Qinghai Mingxing Biological Engineering Co., Ltd, the Chinese health supplements provider, for €6m.

Another area that we have witnessed significant recent activity is in pharmaceutical outsourcing service providers. This comes as many pharma companies increasingly look to outsource services and concentrate on their core capabilities. Over a 6 month period we have seen over 50 deals close including:

  • Cinven’s acquisition of BioClinica, Inc., the US-based provider of specialty clinical trial services; and
  • Albany Molecular Research Inc.’s acquisition of Euticals SpA, the Italy-based contract manufacturer of synthesis and pharmaceutical products, for €315m.

Given the fragmented nature of the VMS market and ongoing consolidation and investor interest in pharma outsourcing services, we at Clearwater International will continue to watch keenly for activity in both markets.

For a more in-depth analysis of the sector please see our Pharmaceutical & Biotechnology Report, which can be found here.

Or for a more specific focus on the VMS market see our recent Vitamins, Minerals and Supplements Clearthought which can be found here.

 

Medical Equipment and Supplies

Tox Free Solutions Ltd., the listed Australia-based provider of industrial and waste management services acquired Daniels Corporation International Pty Ltd., the Australia-based manufacturer of reusable systems for sharps, medical and pharmaceutical waste removal, for €131m.

Shanghai Genext Medical Technology Co., Ltd., the China-based service provider of organ transplant, stem cell technology and regenerative medicine acquired Lifeline Scientific, Inc., the US-based manufacturer of products for the transplant community for donor recovery, preservation and transport, for €65m.

Air Water Inc., the listed Japan-based provider of chemical, medical, energy, agriculture and food products acquired a 50.1% stake in Kawamoto Corporation, the listed Japan-based provider of medical and hospital supplies, for €69m.

Jupiter Diagnostics, the UK-based developer of blood test readers acquired SuperNova Diagnostics, Inc., the US-based medical and industrial diagnostics company and L3 Technology Limited, the UK-based developer of a point of care testing system for reading blood analytes.

 Canon Inc., the listed Japan-based conglomerate acquired Toshiba Medical Systems Corporation, the Japan-based developer of medical diagnostic imaging systems and medical solutions, for €5.3bn.

Arlington Capital Partners, the US-based private equity firm acquired Molecular Products Group Limited, the UK-based manufacturer of medical devices, gas filters and oxygen generators.

 

Health and Social Care

Envision Healthcare Holdings, Inc., the listed US-based provider of emergency medical services acquired AmSurg Corp., the US-based developer and operator of ambulatory surgery centres, for €6bn.

Premier, Inc., the US-based health improvement company acquired Essensa Ventures, LLC, and the remaining 50% stake in Innovatix, both US-based group purchasing organisations, for €345m.

Croftwood Care (Cheshire) Ltd., the UK-based provider of residential homes for the elderly acquired CLS Care Homes Limited, the UK-based operator of 18 care homes, for €27m.

Global Medical REIT LP, the US-based real estate investment trust acquired three inpatient rehabilitation facilities in the US from HealthSouth Corporation, the listed US-based provider of inpatient surgery, diagnostic imaging, and rehabilitative healthcare services, for €65m.

Pebbles Care Limited, the UK-based provider of children’s services acquired Crossway Services Ltd., the UK-based operator of child care homes.

Union life Insurance Company, Ltd., the China-based life insurance provider and Cindat Capital Management Limited, the China-based real estate investor acquired a 75% stake in 11 seniors housing properties and 28 long-term/post-acute care facilities from Welltower Inc., the listed US-based real estate investment trust, for €837m.

 

Pharmaceuticals and Biotechnology

Sienna Biopharmaceuticals, Inc., the US-based medical dermatology and aesthetics company acquired Creabilis SA, the UK-based specialty pharmaceutical company producing drugs for dermatological and inflammatory diseases, for €140m.

Evotec AG, the listed Germany-based provider of drug discovery solutions acquired Cyprotex Plc, the UK-based provider of in vitro and in silico, toxicity and pharmacokinetic information services, for €57m.

Pfizer Inc., the listed US-based provider of healthcare and pharmaceutical products acquired the small molecule antibiotics business of AstraZeneca, the UK-based developer of medicines.

 Medivir AB, the listed Sweden-based developer of oncology and osteoarthritis acquired the assets of TetraLogic Pharmaceuticals Corporation, the US-based clinical biopharma company developing small molecule therapeutics in oncology and infectious diseases, for €11m.

 Novartis AG, the listed Switzerland-based human, animal and agricultural pharmaceutical business acquired Ziarco Pharma Ltd., the UK-based developer of therapeutic agents for treating inflammatory and allergic diseases.