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October 13, 2014 Issue:
Recent Health Care M&A Deals
Acquirer
Target
Price
Home Health & Hospice
Five Points Healthcare
Willowbrook Health Systems
N/A/
Homestead of Centerville Operations, LLC
Home Health Care Agency
$100,000
Hospitals
University of Virginia
Medical Center
Culpeper Regional Hospital
$50 million
Physician Medical Groups
Grove Hill Medical Centers, P.C.
Connecticut Multispecialty Group, P.C.
Merger
CareFusion Sold to BD for $12.2 Billion
The Medical Device sector just got a tad smaller, as Sand Diego-based CareFusion Corporation (NYSE: CFN) agreed to be acquired by Becton, Dickinson & Co. (NYSE: BDX) for $49 per share in cash and 0.777 of a share of BDX, or a total of $58.00 per share. Upon closing, BDX shareholders will own approximately 92% of the company. The complementary portfolios will create a global leader n medication management and patient safety solutions. DBX expects the transaction to be accretive to cash EPS on a double-digit basis in the first full year. Closing is expected in the first half of 2015.
Long-Term Care Sector Spending Up 200% in Q3:14
In the next two weeks, M&A activity in the Long-Term Care sector will surpass the total number of deals announced in 2013. And that was a record year for the sector, ending with 225 announced transactions. As of October 7, we have 213 deals on the books, and still have the rest of the fourth quarter to go. Spending is hot and heavy, too, as you can see from the chart below. Quarter-over-quarter, Q3:14 spending hit $9.6 billion, up 200% compared with the same quarter the year before. With $20 billion and counting for an annual total, the Long-Term Care sector is poised for a blowout year. Hang on to your hats.
Long-Term Care M&A Spending,* by Quarter, 2013 and 2014
Quarter
2014
2013
Q1
$5,579
$1,621
Q2
$5,247
$2,929
Q3
$9,627
$3,211
Q4
N/A
$3,889
Total (so far)
$20,454
$11,650
*=in millions. Source: The Health Care M&A Information Source, October 10, 2014
Hostilities End for Gentiva Takeover by Kindred
In May, Kindred Healthcare, Inc. (NYSE: KND) made an unsolicited offer for Gentiva Health Services, Inc. (NASDAQ: GTIV) of $ 14.00 per share, made up of half cash and half stock, representing a 64% premium over Gentiva’s closing price on May 14. Kindred said it would be willing to pursue a 100% cash bid, which, including the assumption of debt, would be worth about $1.6 billion. Despite the financial markets’ approval, Gentiva declined and the hostilities began. Last Thursday, the final deal was announced, giving GTIV shareholders $14.50 per share in cash and $5.00 of KND common stock, which equates to 0.257 shares. The transaction, including assumption of debt, is valued at $1.8 billion. Not bad.
Neuroscience Startup Thync Gets $13m from Khosla Ventures
Is Vinod Khosla bent on world domination through mind control? Probably not, but his venture capital fund Khosla Ventures just led a $13 million round of financing for Silicon Valley-based Thync, a neuroscience startup that is creating a new category of wearable products to measure neurosignaling algorithms. That is, waveforms that signal neural pathways. The goal is to shift and optimize the wearer’s state of mind in areas related to energy, calm and focus. The two data points they deem relevant are that, in the U.S., energy drinks rake in $12.5 billion in sales annually, and the wearables market is projected to top $7 billion in sales next year. They’re betting a chemical-free product can tap into the brain’s own chemicals will get some stimuli going. We’ll see…….Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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