It seems that many companies are now making acquisitions that focus on their core capabilities and worrying less about diversification into other areas; as the saying goes, ‘stick to what you know’. Just last month, we saw the following multinationals make acquisitions to strengthen their core business:
- US-based CooperSurgical, a provider of women’s health care products, acquired UK manufacturer of IVF devices Research Instruments Ltd;
- UK-based Halma strengthened its ophthalmology business with the acquisition of Visiometrics, a designer and manufacturer of ophthalmic diagnostic instruments; and
- Sweden-based infection control company Getinge purchased Stericool, a Turkish company manufacturing low temperature steriliser units for hospitals.
It’s not just the case in the medical equipment and supplies market though. Last year, UK-based health and social care company Care UK kicked off the trend of disposals when it sold three of its non-core divisions to focus on its core activities. If a company is operating in a market where it is not currently the leader and only expecting moderate growth, then the non-core division would likely benefit by being part of a provider who is committed to that particular market.
In another non-core asset divestment transaction, Priory Group, the UK mental health services provider, is rumoured to have appointed Rothschild to sell its elderly care arm, Amore Care. Priory has also been making headlines recently following the announcement that it will be acquired by NASDAQ-listed Acadia Healthcare Company, operator of behavioural and mental health treatment facilities, which entered the UK market 18 months ago via the purchase of Partnerships in Care. It was rumoured just last year that Priory, which operates over 300 behavioural facilities across the UK, was ploughing ahead with plans to list on the LSE. The deal is yet another example of the US’s continued and strong interest in the UK health and social care market.
Health & Social Care
Ramsay Générale de Santé – the hospital operator and French subsidiary of Ramsay Health Care, Australia’s largest private hospital operator – acquired (following regulatory approval) France’s HPM Group which operates nine hospitals in Lille, for a consideration of €169.5m.
CVS Pharmacy, Inc., a subsidiary of NYSE-listed CVS Health, completed the previously announced acquisition of Target Corporation’s pharmacy and clinic businesses for a consideration of €1.7bn. CVS Pharmacy is an operator of drug stores and currently the second largest pharmacy chain in the US, after Walgreens.
International private healthcare group BUPA acquired five care homes and two development sites from Hadrian Healthcare, the UK care home operator, in a multi-million Euro deal. The deal allows Hadrian to focus on growing its luxury brand.
UK private medical insurance provider Chase Templeton, backed by UK private equity firm Palatine, acquired Healthcare Partners for an undisclosed consideration. Healthcare Partners, trading under the Avanti Healthcare brand, provides private health insurance including private medical, income protection, critical illness cover, and dental plans. The deal marked Chase’s eighth acquisition of 2015.
Estia Health Ltd, a leading residential-aged care provider in Australia, purchased family-owned Australian business Kennedy Health Care Group for an undisclosed consideration. Kennedy Health Care Group provides residential-aged care, nursing homes and retirement village living with 959 operational places across eight facilities.
Following on from its acquisition of UK cosmetic surgery company Transform Medical in July, pan-European mid-market investor Aurelius Group acquired in the UK once again with the €27m purchase of Allied Healthcare, the UK’s largest domiciliary care business, from Saga plc.
Extendicare Inc., a listed Canadian provider of senior care services, acquired:
- Harvest Retirement Community, Inc., a 64 suite retirement community operator in Canada, for a consideration of €20m; and
- The 116-suite Stonebridge seniors home in Saskatoon, Canada and the Riverbend facility in Regina, Canada from Brightwater Senior Living Group, for a consideration of €35m.
Medical Equipment & Supplies
Netherlands-based private equity firm H2 Equity Partners BV acquired GBUK Ltd, a UK-based distributor of medical devices and medical consumables to hospitals and NHS trusts, for an undisclosed amount.
Comfort Medical LLC, the US-based leading national mail-order provider of urological and ostomy supplies, acquired Medical Direct Club LLC for an undisclosed amount. Medical Direct Club is the third largest direct-to-consumer supplier of urological catheters and supplies in the US.
Getinge Infection Control AB, a manufacturer of disinfectors and sterilisers for the healthcare and life sciences segments and subsidiary of global infection control company Getinge AB, acquired Stericool, a Turkish company manufacturing low temperature steriliser units for hospitals, for an undisclosed amount.
CooperSurgical, Inc., the US-based provider of women’s health care products and a subsidiary of listed healthcare company The Cooper Companies, acquired UK manufacturer of IVF devices Research Instruments Ltd for a consideration of €47m.
LSE-listed hazard detection and life protection group Halma plc acquired Visiometrics, S.L., located in Spain, and Visual Performance Diagnostics, Inc., located in the US, – together referred to as “Visiometrics” – for a total consideration of €87m. Visiometrics designs, manufactures and markets ophthalmic diagnostic instruments, and will become part of Halma’s Medical sector.
Etac AB, the Sweden-based developer of mobility equipment and solutions and portfolio company of Swedish investment firm Nordstjernan, acquired US-based Convaid Products Inc., a manufacturer of mobility products, for an undisclosed amount.
Pharma & Biotech
AIM-listed pharmaceutical firm Alliance Pharma acquired the healthcare products division of Sinclair IS Pharma for €188m. The division acquired manufactures and markets wound care products, skin care products, and hospital products.
Swander Pace Capital, the US private equity firm specialising in investments in lower middle market companies, acquired Captek Softgel International, Inc., the US manufacturer and distributor of softgels for vitamin, mineral and supplement (“VMS”) brands.
In a €2.8bn deal, a consortium led by Dr Ge Li, the chairman and CEO of Wuxi Pharmatech (Cayman) Inc., Hillhouse Capital and Ally Bridge Group Capital Partners, acquired and subsequently privatised Wuxi Pharmatech, a US-listed, China-based global contract R&D services provider.
Mithra Pharmaceuticals SA acquired the remaining 50% stake in Novalon SA, the Belgium-based developer of the projects Zoreline® and Myring®, as well as the global rights to these products, for a consideration of €18m. Zoreline® is a generic candidate of Zoladex® which is a bio-degradable subcutaneous implant for prostate and breast cancer and benign gynaecological indications; Myring® is a generic candidate of NuvaRing® which is a combined hormonal contraceptive vaginal ring.
NASDAQ-listed, Ireland-headquartered clinical research organisation ICON plc acquired PMG Research Inc., the US-based integrated network of clinical research sites, for an undisclosed amount.
American multinational medical devices, pharmaceutical and consumer packaged goods manufacturer Johnson & Johnson acquired Novira Therapeutics, Inc., a US clinical-stage biopharmaceutical company developing novel therapies for curative treatment of chronic hepatitis B virus (HBV) infection, for an undisclosed amount.
European specialist healthcare investor GHO Capital Partners acquired Quotient Clinical Ltd from Bridgepoint Development Capital, for an undisclosed amount. Quotient is a UK-based provider of outsourced, early-stage drug development services to the pharmaceutical industry. Subsequently, Quotient acquired UK-based contract development company Co-Formulate Ltd for an undisclosed amount.