One key trend we’ve been following at Clearwater International is the increasing interest in high-end UK specialist care services businesses from financial investors and US strategics.
This has been demonstrated recently by:
- Acadia Healthcare’s acquisition of UK mental healthcare provider Partnerships in Care (PiC);
- Duke Street LLP, Partners Group Holding AG and Tikehau Capital Partners’ acquisition of Voyage Care, a UK provider of specialist residential services and supported living for people with learning and physical disabilities; and
- the announcement this month that Universal Health Services is set to acquire Cygnet Health Care, the UK mental health and addiction centre operator.
As a result of this, we expect to see an increase in M&A activity in the healthcare services space over the next 12 months. These large platforms will look to grow and stay competitive by making acquisitions, thus consolidating the fragmented market.
This is an area that Clearwater International knows well, having recently advised Ansel Group, a specialist in personality disorder services, on its sale to London Stock Exchange-listed Cambian Group (LSE: CMBN), one of the largest providers of specialist behavioural health services in the UK.
Health & Social Care Deals
Median Kliniken GmbH & Co. KG, the Germany-based rehabilitation care provider and operator of a chain of rehabilitation clinics, acquired ATOS Privatklinik München GmbH & Co. KG, the Germany-based hospital operator, for an undisclosed amount.
Avery Healthcare, the UK residential, care and nursing home provider, acquired the UK arm of The Hawthorns Retirement Homes Group for an undisclosed amount. The Hawthorns has retirement living communities in Braintree, Eastbourne and Somerset.
Sunrise Senior Living and Health Care REIT acquired the UK-based management company and 11 care homes of Gracewell Healthcare from investment firm Patron Capital, for a consideration of €191.5m. Sunrise Senior Living is a US-based operator of care homes.
Digital Payments plc, the UK-based investment firm, acquired Muscato Group Inc for a consideration of €11.3m. Muscato is a US-based company which develops, markets, licences and implements transaction processing software, primarily for healthcare and financial payment sectors.
Duke Street LLP, Partners Group Holding AG and Tikehau Capital Partners acquired a c.65% stake in UK care provider Voyage Care from HG Capital, for a consideration of €470m.
US REIT HCP acquired 20 Maria Mallaband Care Group (MMCG) properties in a sale and leaseback arrangement, for a consideration of €95m. MMCG provides residential and nursing care at over 60 units across the UK.
Tenet Healthcare Corporation acquired Emanuel Medical Centre, the US-based 209-bed Christian hospital, for an undisclosed amount. Tenet Healthcare is a healthcare services company which owns and operates 80 acute care hospitals and 193 outpatient centres in the US.
Pharma & Biotech Deals
Alliance Boots GmbH, the Switzerland-based pharmacy-led health and beauty group, acquired the remaining 50% stake not held in Unidrug Distribution Group, the UK-based company that warehouses and distributes pharmaceuticals and OTC medicines, from its joint venture partner UDG Healthcare plc, based in Ireland, for a consideration of €82m.
Mallinckrodt plc acquired Questcor Pharmaceuticals Inc, a US-based manufacturer and wholesaler of prescription pharmaceuticals, for €4.1bn; 5.9x sales, 10x EBITDA. Mallinckrodt, based in Ireland, produces speciality pharmaceutical products including generic drugs and imaging agents.
Akorn Inc acquired VersaPharm Inc, a US-based manufacturer and wholesaler of speciality pharmaceuticals, for a consideration of €17.9m. Akorn is a US-based manufacturer of diagnostic and therapeutic ophthalmic pharmaceuticals, as well as niche hospital drugs and injectable pharmaceuticals.
US-based Oncothyreon Inc acquired Alpine Biosciences Inc, a US biotechnology company, for a consideration of €22.2m. Oncothyreon is a clinical-stage biopharmaceutical company focused primarily on the development of therapeutic products for the treatment of cancer.
Abbey Pharma Ltd acquired Peckforton Pharmaceuticals Ltd, a UK-based speciality pharamaceuticals developer, from Enterprise Ventures Ltd and YFM Equity Partners Ltd for an undisclosed amount. Abbey Pharma is a UK manufacturer and distributor of prescription and OTC products. Clearwater International advised Peckforton on the transaction.
Sterigenics International Inc, a US-based provider of contract sterilisation and ionisation services for medical devices, food safety and advanced applications – and a unit of GTCR LLC, acquired Nordion Inc for a consideration of €376.5m. Nordion is a Canada-based manufacturer, developer and wholesaler of medical isotopes used for the prevention, diagnosis and treatment of disease.
UK-based drugs firm ProStrakan Group plc, a subsidiary of Japanese pharmaceutical company Kyowa Hakko Kirin, acquired Archimedes Pharma Ltd, a UK-based speciality pharmaceuticals manufacturer, from Novo A/S for €288m.
Ducat Ventures plc acquired OptiBiotix Health Ltd, a UK-based biotechnology company, for a consideration of €2.5m. Upon completion, Ducat changed its name to OptiBiotix Health plc and is now listed on the AIM.
Medical Equipment & Supplies Deals
Irish company Covidien plc acquired Reverse Medical Corporation, an anti-neurovascular disorder embolic protection medical device manufacturer based in the US, and Sapheon Inc, a US-based manufacturer of medical closure devices, for undisclosed amounts. Covidien is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings.
Medtronic Inc acquired the remaining 70% interest in NGC Medical SpA, an Italy-based medical instruments and equipment manufacturer, for an undisclosed amount. Medtronic is a US-based medical technology company.
GTCR LLC, the US private equity firm, acquired Cole-Parmer Instrument Company from Thermo Fisher Scientific Inc for a consideration of €354.9m. Cole-Parmer is a US manufacturer and distributor of speciality laboratory equipment, instruments and supplies to a diverse range of customers in pharmaceutical, biotech, healthcare, chemicals, food and other markets.
St Jude Medical Inc (STJ) acquired Neuro Therm Inc for a consideration of approximately €155m. STJ is a global medical device company based in the US. Neuro Therm is a US-based radiofrequency pain management equipment manufacturer.
CooperVision (UK) Holdings Ltd, a soft contact lens manufacturer and unit of The Cooper Companies Inc, acquired Sauflon Pharmaceuticals Ltd for a consideration of €894.6m. Sauflon is a UK-based manufacturer and wholesaler of contact lenses and aftercare solutions.