Healthcare Sector Comment – July 2013

Date

July saw the completion of 19 deals in the UK healthcare market. An interesting deal was Griffin-American Healthcare’s acquisition of 44 elderly care properties from Myriad Healthcare for £298m. Griffin is also providing a £75m facility in development finance to fund five of Myriad’s current developments and enhance their existing homes. These properties will then be leased back to Myriad for 35 year leases. This sale and leaseback deal provides circa 6-7% yield for the REIT and a stronger balance sheet for Myriad Healthcare. We will continue to see Healthcare REIT organisations investing in high quality Tier 1 elderly care properties that have a high concentration of self pay residents.

This month also saw MAXIMUS acquire Health Management Limited, an independent provider of occupational health care services in the United Kingdom. The acquisition establishes a foothold for MAXIMUS Health Services in the UK, and also supports their long-term growth objectives as they expand their service offerings and core capabilities into new markets.

Deals

Kinetic Concepts Inc acquired Systagenix Wound Management Ltd from One Equity Partners, for a total consideration of £318m. Kinetic Concepts is a US healthcare company. Systagenix is a UK company which develops and produces wound care products.

Crown Bioscience acquired Precos Inc for an undisclosed amount. Crown Bioscience is a US oncology Service Company. Precos is a UK pre-clinical research and development service with a specific focus on oncology.

Vision Express (UK) Ltd acquired 2020 Optical Store for an undisclosed amount. Vision Express is an optician operator and optical goods retailer. 2020 are UK optical care specialists.

Techne Corporation acquired Bionostics Holdings Ltd, for a total consideration of £68m. Techne Corporation is a US Manufacturer of hematology controls and biotechnology products for research and diagnostics. Bionostics Holdings is a UK in vitro diagnostic control devices developer and manufacturer.

DCC Healthcare Ltd acquired Leonhard Lang Ltd, for a total consideration of £11m. DCC Healthcare is a UK seller, marketer and distributor of pharmaceuticals and medical devices. Leonhard Lang Ltd is a UK electrode system manufacturer.

Bain Capital LLC acquired Plasma Resources UK Ltd, for a total consideration of £200m. Bain Capital is a US private equity firm. Plasma Resources is a UK purchaser and wholesaler of plasma and related products.

Springfield Homecare Services acquired Helping Hands HCS Ltd for an undisclosed amount. Springfield Homecare Services is a UK domiciliary home care company. Helping Hands is a UK care services provider.

MedicX Pharmacy acquired a portfolio of five pharmacies in the North West from Safehands Healthcare for an undisclosed amount.

Griffin-American Healthcare REIT II acquired 44 care homes from Myriad Healthcare for a total consideration of £297m. Griffin-American Healthcare is US private equity firm. Myriad Healthcare is a UK provider of residential care facilities to elderly people.

Ipsen SA acquired Syntaxin Ltd, for a total consideration of £24m. Ipsen SA is a French researcher, manufacturer, and seller of pharmaceutical products. Syntaxin is a UK based biopharmaceutical company.

Synergetics Surgical EU Ltd acquired Miss Opthalmics Ltd, for a total consideration of £2.8m. Synergetics is a US supplier of precision surgical devices. Miss Opthalmics is a UK opthalmic and neurosurgical precision devices wholesaler.

Montagu Equity Partners acquired CliniSys for an undisclosed amount. Montagu Equity Partners is a Northern Europe private equity firm. CliniSys is a UK Healthcare IT company.

Clearwater Care acquired TL Care for an undisclosed amount. Clearwater Care is a UK company that provides residential care facilities and supported living services for adults with learning disabilities. TL Care is a UK supported living provider.

Dipple & Conway (Norwich) Ltd acquired A Stodel Optometrists for an undisclosed amount, both are UK optometry firms.

Eden Supported Living Ltd acquired Housing & Support Solutions Ltd for an undisclosed amount. Eden Supported is a UK company that provides high quality living, person centred care, support and enablement for people with disabilities and support needs. Housing & Support Solutions is a UK care services provider.

Salmon Harvester Properties and Rock Care Partnerships acquired The Wycliffe Centre conference site for the construction of a retirement village, for a total consideration of £45m. Salmon Harvester Properties is a joint venture company between property developers Salmon Developments and National Farmers Union Mutual Insurance. Rock Care Partnerships is a development company specialising in care homes, assisted living and retirement communities. The Wycliffe Centre is a 25 acre development site in Buckinghamshire.

Primary Health Properties (PHP) acquired Primary Health Care Centres (PHCC) for a total consideration of £26.8m. PHP is a UK company that specialises in the ownership of freehold or long leasehold interests in modern purpose-built healthcare facilities. PHCC is a UK company that invests in primary care and pharmacy properties.

Nutrahealth Ltd acquired Max Healthcare Institute Ltd for an undisclosed amount. Nutrahealth is the UK arm of Elder Pharmaceuticals, which is a Mumbai based pharmaceutical manufacturing & marketing organisation. Max Healthcare is an Indian company that owns a range of marketing authorisations and provides own-label and branded OTC medicines and products.

Maximus Inc acquired Health Management Ltd for a total consideration of £52m. Maximus INC is a US company that provides services to government health and human services agencies. Health Management Ltd is a UK occupational healthcare services company.