Healthcare Sector Comment – February 2017

February Sector Comment – Medical Furniture

In a month where the availability of hospital beds in the UK has come to the forefront of that nation’s consciousness, we have seen a spike in activity in the durable medical equipment (DME) sector. Driven by the ageing demographic and the need for hospitals and care homes to replace old, tired stock, and use innovative products that produce better clinical outcomes, the market for DME including beds, mobility products, bathing aides and other health furniture is set to continue to grow at a steady pace.

In the last month alone we have seen the following deals close in the DME sector:

  • Clayton, Dubilier & Rice’s acquisition of a controlling stake in Drive DeVilbiss Healthcare, the US-based manufacturer of DEMs including mobility & bariatric products and wheelchairs;
  • Followed by Drive DeVilbiss’ acquisition of Sidhil Ltd., the UK-based manufacturer of DME, including beds, chairs and lifting products. Clearwater International advised Sidhil on the transaction; and
  • Indutrade’s acquisition of Sunflower Medical Ltd., the UK-based medical furniture manufacturer, providing design and refurbishment equipment services.

At Clearwater International we have significant expertise in the sector with recent credentials including advising Sidhil in the deal mentioned above, advising Direct Healthcare Services on its sale to NorthEdge Capital and advising Prism Medical on the sale of its UK subsidiary to LDC. We believe we will continue to see innovation which is specifically designed for the end user, making products more efficient and effective.


A taste of deals in January

Medical Equipment and Supplies

Marc Miribel, the private investor acquired a 42.74% stake in M.P. Hygiene, S.A.S, the France-based company that manufactures and distributes paper wipes, non-woven wipes, disposable safety products and hand cleaners. Clearwater International advised the shareholders of M.P. Hygiene on the sale of its stake in the business.

Convatec Group plc, the listed UK-based company that develops wound and ostomy care products acquired EuroTec B.V., the Netherlands-based manufacturer of ostomy appliances, for €25m.

Abbott Laboratories, the listed US-based company offering diagnostics, medical devices, nutritionals and generic pharmaceuticals acquired St. Jude Medical, the listed US-based manufacturer of cardiovascular medical devices, for €26.3bn.

WerfenLife, the Spain-based manufacturer of in-vitro diagnostics products and medical devices acquired Accriva Diagnostics, the US-based developer of devices for blood diagnostics, for €357m.

Terumo Corporation, the listed Japan-based manufacturer of medical devices, equipment, pharmaceuticals and supplements acquired Kalila Medical, Inc., the US-based developer of steerable catheter technologies and the vascular closure and electrophysiology businesses of St. Jude Medical and Abbott Laboratories, for €1.0bn.

Phoenix Equity Partners Limited, the UK-based private equity firm acquired Rayner Intraocular Lenses Limited, the UK-based manufacturer of intraocular lenses and associated instruments used in cataract surgery.

Ansell Limited, the listed Australia-based provider of protective healthcare products acquired Nitritex Limited, the UK-based manufacturer of cleanroom consumables, and medical and safety products, for €67m.


Health and Social Care

National Health Industries, Inc., the US-based home healthcare provider acquired an 80% stake in CHS Home Health, the US-based Medicare home healthcare provider, for €117m.

WellCare Health Plans, Inc., the listed US-based provider of managed care services to the public sector acquired Care1st Health Plan Arizona, Inc., and ONECare by Care1st Health Plan Arizona, Inc. both US-based providers of managed healthcare plans and services, for €140m.

HC-One Limited, the UK-based nursing care home operator acquired Helen McArdle Care Limited, the UK-based nursing care home operator.

Global Medical REIT, Inc., the listed US-based real estate investment trust acquired Geisinger Imaging Centre and Clinic Property in Central Pennsylvania and a 25,814 square-foot Medical Office Building in Cape Coral, Florida, for a combined €14m.

Primary Health Properties plc, the listed primary healthcare facilities investment vehicle acquired Carden Medical Investments Limited, the UK-based owner of medical care facilities, for €8m.


Pharmaceutical and Biotechnology

Boehringer Ingelheim, the Germany-based researcher and developer of pharmaceutical products acquired Merial S.A.S., the France-based manufacturer of veterinary pharmaceuticals and vaccines, for €11.4bn.

LG Chem, Ltd., the listed South Korea-based conglomerate acquired LG Life Sciences, Ltd., the South Korea-based manufacturer of fertility pharmaceuticals, animal health products and speciality chemicals, for €1.1bn.

Accord Healthcare Ltd., the US-based developer of generic pharmaceuticals acquired Actavis UK Ltd. and Actavis Ireland Ltd., both generic pharmaceutical manufacturers based in the UK and Ireland respectively, for €685m.

Pharmaron, Inc., the China-based outsourcer of development, manufacturing and clinical research has acquired Xceleron Inc, the US-based accelerator mass spectrometry specialist.

LDC, the UK-based private equity firm acquired Fishawack Communications Ltd., the UK-based provider of communications services to pharmaceutical and life sciences companies, for €44m. Clearwater International advised LDC on backing the management buyout.