Healthcare sector comment – August 2011

Date

A significant deal this month was the announcement that Saga Group will look to strengthen its domiciliary care business with the acquisition of Allied Healthcare, for a purchase price of £107m.

Allied Healthcare is a leading provider of domiciliary care in the UK and Ireland and operates a community-based network of about 110 branches. Saga had set out its intention to accelerate its growth strategy into the home healthcare services market by establishing the Saga Independent Living business in Kent and then acquiring Nestor last December making Saga the largest individual domiciliary care provider. Interestingly, the acquisition of Allied Healthcare gives Saga a 6% share of the domiciliary care market, indicating that there is still plenty of scope for further consolidation in the market. Some smaller providers may be more vulnerable and get squeezed due to funding pressures and unrealistic fee rate requests by local authorities. As a result, we expect to see more activity in this sector.

Deals

Saga Group Ltd has acquired Allied Healthcare Group Ltd for a consideration of £107m. Saga Group, provides holidays, cruises, magazines, insurance and financial products to the elderly market. Allied Healthcare Group provides domiciliary care and healthcare staffing services.

General Medical Clinics Plc has acquired Medicentres Ltd from the administrator, for a consideration of £0.8m. Medicentres provide private primary medical care in walk-in centres and occupational health services.

An MBO team has acquired Technology in Motion Ltd for an undisclosed amount. Technology in Motion, a wholly-owned subsidiary of Ossur, provides orthopaedic braces and supports for knee and ankle injuries and osteoarthritis sufferers.

SuperGen Inc has acquired Astex Therapeutics Ltd for a consideration of £34m. SuperGen is a US-based pharmaceutical company dedicated to the discovery and development of novel cancer therapies. Astex is a privately held UK-based biotechnology company developing targeted therapies.

The Baker Company Inc has acquired Ruskinn Technology Ltd for an undisclosed amount. The Baker Company is a US-based company specialising in the engineering, testing and production of laboratory contamination control equipment. Ruskinn Technology is a South Wales-based manufacturer of anaerobic and modified-atmosphere workstations.

City & County Healthcare Holdings acquired Community and Homecare Services, for an undisclosed amount. City and County Holdings is a domiciliary care business providing personal home-support to vulnerable people. Community and Homecare Services is a UK community-based care and support services provider.

Select Living Options Ltd has acquired Inclusion Care Ltd, for an undisclosed amount. Select Living Options provide services to people with disabilities. Inclusion Care is a Worcestershire-based care organisation supporting adults with learning disabilities and mental health.

Synergy Health Plc has acquired Sterilgamma Ltd for an undisclosed amount. Synergy Health is a UK-based company that delivers services and products concerned with healthcare management. Sterilgamma is a Malaysia-based company specialising in gamma and ethylene oxide sterilization, logistics and other value added services.

Four Seasons Health Care Ltd has acquired Care Principles Ltd for an undisclosed amount. Four Seasons Health Care is a UK-based company operating a network of healthcare centres and nursing homes. Care Principles provides assessment, treatment, and rehabilitation for adults with learning disabilities, personality disorders and autistic spectrum disorders.