Healthcare Sector Comment – August 2017 – Specialist Care Services

Over the last 12 months we have seen close to 50 deals complete globally in the Specialist Care Services market, which includes treatment for patients with learning disabilities, mental health issues, and neurological and developmental conditions, such as Asperger’s and Autism. The US was the most active accounting for 52% of transactions, closely followed by the UK (35%) and then Sweden (6%). Interestingly, the majority have been domestic acquisitions, showing that given the complexity of the sector, acquirers would rather pursue assets in their local markets, where they have a better understanding of the regulations. The most active sub-segment of the market is care provision for individuals with learning disabilities and mental health issues. There has been continued investor interest in the Specialist Care sector, with private equity involved in more than a third of deals over the last 12 months.

Notable deals  include:

  • Global Partner Acquisition Corp’s acquisition of Sequel Youth and Family Services, LLC, the provider of behavioural health and secure services for people with learning disabilities and mental health issues
  • Nytidia’s acquisition of Resursteamet i Stockholm AB, the provider of day-care assistance to people with mental health disabilities
  • The National Fostering Agency’s acquisition of Acorn Care & Education, the provider of education and support for children with special educational needs

In such a vitally important area of care where new investors and regulations are disturbing the market, we at Clearwater International have a wealth of experience in advising business owners operating in the care setting. These include advising:

 

A taste of deals recent deals

Medical Equipment & Supplies

 

Interlock Medizintechnik GmbH, the Germany-based manufacturer of medical, surgical, ophthalmic, and veterinary instruments and apparatus has merged with Key Surgical, Inc., the US-based provider of sterile processing and operating room supplies in a merger led by Water Street Healthcare Partners, the US-based private equity firm.

Sinclair Pharma, the listed UK-based provider of dermatological products acquired the Refine Support System of Refine LLC, comprising a patented and FDA cleared, suture-based product primarily used in breast cosmetic and reconstructive procedures, for €8m.

Sygnis Pharma AG, the listed Germany-based developer of integrated solutions to the life science industry acquired Innova Biosciences Ltd, the UK-based provider of bioconjugation technologies and services, for €7m.

DRS Technologies, Inc., the US-based defence technology company, manufacturing integrated systems for both military and homeland markets acquired Daylight Solutions, Inc., the US-based developer and supplier of quantum cascade laser products and technology, for €142m.

Apple Inc., the listed US-based technology company acquired SensoMotoric Instruments, the Germany-based provider of dedicated computer vision applications and application-specific gaze and eye tracking systems.

BioTelemetry, Inc., the listed US-based wireless medical technology company specialising in the diagnosis and monitoring of cardiac arrhythmias acquired LifeWatch AG, the formerly listed Switzerland-based manufacturer of advanced telehealth systems and monitoring services for high-risk and chronically ill patients, for €234m.

 

Health & Social Care

NorthWest Healthcare Properties REIT, the listed Canada-based open-ended, healthcare-focused real estate investment trust (REIT) acquired a 77.3% stake in Generation Healthcare REIT, the formerly listed Australia-based REIT focusing on investment in healthcare real estate, for €415m.

Penta Capital Partners Limited and Toscafund Asset Management LLP, both UK-based private equity firms acquired a 73.3% stake in Circle Holdings plc, the formerly listed UK-based provider of general healthcare, rehabilitation and musculoskeletal services, for £65m€73m.

MultiCare Health System, Inc., the US-based operator of hospitals, urgent, primary and speciality care clinics acquired Spokane Washington Hospital Company, LLC, the US-based operator of an acute care hospital, for €399m.

Physicians Realty L.P., the US-based self-managed healthcare real estate company acquired BCC Cancer Center Venture, L.P., the US-based cancer facility, for €255m.

Kohlberg Kravis Roberts & Co. L.P., the listed US-based global investment firm acquired Angelica Corporation, the US-based provider of linen management services to the healthcare market, for €117m.

Hengkang Medical Group Co.,Ltd, the listed China-based provider of medical services, pharmaceuticals, health care products and cosmetics acquired a 70% stake in PRP Diagnostic Imaging Pty Limited, the Australia-based provider of diagnostic imaging services including X-ray, MRI and ultrasound scans, for €329m.

 

Pharmaceuticals & Biotechnology

Audax Private Equity Group, the US-based private equity firm acquired AltaSciences Company Inc., the Canada-based provider of clinical contract research services to pharmaceutical, generic drug, biopharmaceutical and biotechnology industries.

Gilde Buy Out Partners BV, the Netherlands-based private equity firm acquired Oystershell Laboratories, the Belgium-based manufacturer of consumer health care products, for approximately €100m.

Cell Medica Limited, the UK-based manufacturer of cellular immunotherapy products acquired Catapult Therapy TCR Limited, the UK-based provider of clinical trial services to develop T-cell therapy for treatment of acute myeloid leukaemia and other blood cancers.

RoundTable Healthcare Partners, LP, the US-based private equity firm acquired an undisclosed majority stake in Deerland Enzymes & Probiotics, Inc., the US-based manufacturer of enzyme and probiotic based dietary supplements.

 Bioverativ Inc., the listed US-based developer of therapies for the treatment of haemophilia and other blood disorders acquired True North Therapeutics, Inc., the US-based biotechnology company that develops humanised antibodies, for €356m.

Trive Capital, the US-based private equity firm acquired an undisclosed stake in Redmond & Greer Pharmacy Supply, the US-based wholesale pharmaceutical distributor supplying prescription drugs.