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July 15, 2013 Issue:
Recent Health Care M&A Deals
Hospitals
Acquirer
Target
Price
University Hospitals
Parma Community General Hospital
N/A
Carter Validus Mission Critical REIT
Physicians Specialty Hospital
$22.625 million
Managed Care
Acquirer
Target
Price
TPG
Envision Pharmaceutical Services
N/A
Medical Devices
Acquirer
Target
Price
ArthroCare
ENTrigue Surgical, Inc.
$45 million
Zoll Medical Corporation
Assets of CoAxia, Inc.
N/A
Services Deal of the Week
National Health Investors, Inc. (NYSE: NHI) announced that its RIDEA joint-venture with Bickford Senior Living has acquired 17 assisted living and memory care communities for $135 million. 14 of the communities were owned by a subsidiary of Care Investment Trust, Inc. (OTCQX: CVTR) and went for $123 million. The remaining three communities were purchased from affiliates of Bickford for $12 million. The acquisition brings the total number of properties owned by the joint venture to 30, including three that are under construction. These newly acquired communities are located in Illinois, Indiana, Iowa and Nebraska. There are a total of 750 units with average occupancy of 90.6%, and the average age of the 17 buildings is 12 years. No word on the average age of the occupants…….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
Charted Territory
Hospitals are the conceptual fulcrum of an Accountable Care Organization, so it stands to reason that they are in the midst of buying entities in complementary sectors. We looked through our database to find mergers and acquisitions that hospitals are making outside of the hospital sector. What we found wasn’t surprising: Home Health & Hospice companies, Physician Medical Groups, and in one case, a managed care company. These entities all contribute to building an ACO. In no case did a hospital or health system acquire a company in a far-afield sector such as Medical Devices. Sometimes it’s nice to see data that confirms what you already know.
Health Care Acquisitions* by Hospitals, through June 2013
Acquirer
Target
Target sector
Kindred Healthcare, Inc.
QStaff Healthcare
Home Health & Hospice
Kindred Healthcare, Inc.
Caring Hearts Home Health
Home Health & Hospice
Scripps Health
San Diego Hospice
Home Health & Hospice
Cooper University Health Care
AmeriHealth New Jersey
Managed Care
SSM Health Care
Dean Health System
Physician Medical Group
University of Virginia Health
Culpeper Medical Associates
Physician Medical Group
* excluding other hospitals as targets. Source: Irving Levin Associates, Inc., June 2013
Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today
Technology Deal of the Week
Roche (OTCQZ: RHHBY) has acquired Constitution Medical Inc. for $220 million cash upfront, as well as further contingent payments depending on how well or if CMI achieves certain milestones. CMI developed a highly innovative hematology testing system, which is designed to give faster and more accurate diagnosis of blood-related diseases. CMI was created and funded by the private equity firm Warburg Pincus and members of CMI’s management team who are former Cytyc Corporation exeuctives. Warburg recently made a high-profile exit from Bausch + Lomb, which it sold to Valeant Pharmaceuticals International (NYSE: VRX) for $8.7 billion, so this deal probably feels like pocket change….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
In the Pipeline
Veracyte, Inc., a molecular diagnostics company in South San Francisco, California, completed the final tranche of its $28 million Series C financing. Proceeds will support the commercial expansion of the company’s first product, the Afirma® Thyroid FNA Analysis, which uses a gene expression test to help reduce unnecessary surgeries as part of thyroid cancer diagnosis, as well as investing in the company’s product pipeline. The Afirma test is covered for Medicare and other insured patients and is available throughout the U.S. through a global co-promotion partnership with Genzyme, a Sanofi company. GE Ventures was a new investor, joined by existing investors Domain Associates, Kleiner Perkins Caulfield & Byers, TPG Biotech and Versant Ventures……Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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Upcoming Interactive M&A Webcast:
Tax-Exempt Entities: Buying, Selling and Valuing
Wednesday, August 7th, 2013, 1:00 pm ET
The not-for-profit merger and acquisition market—specifically not-for-profit health care businesses that acquire other not-for-profit health care businesses—is rapidly and continually evolving. Not-for-profits typically raise capital in different fashions and from different sources than for-profit entities. Find out more from our expert panel: Glenn Fox (Moderator), Attorney at Law, Saul Ewing LLP; Charles Bissell, National Practice Leader, Seniors Housing & Health Care Practice, Integra Realty Resources; Joseph Lupica, Chairman, Newpoint Health; Jeff Petty, CEO, Wesley Enhanced Living; William Pomeranz, Managing Director, Cain Brothers.
Go to http://www.levinassociates.com/conferences/1308-online-conference or call 800-248-1668 to register.
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