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Week ending March 6, 2015:
Recent Health Care M&A Deals
Acquirer
Target
Price
Behavioral Health Care
Acadia Healthcare Company
Quality Addiction Management
$53 million
Epic Health Services
Clarity Service Group
N/A
Hospitals
Prime Healthcare Services
Mercy Suburban Hospital
$30 million
Community Health Systems, Inc.
5 Oklahoma hospitals
N/A
Medical Devices
Boston Scientific Corporation
American Medical Systems urology portfolio
$1.6 billion
Cardinal Health Inc.
Cordis
$1.94 billion
Nikon Corporation
Optos
$400 million
AbbVie Wins Pharmacyclics
Everybody hates a winner, it seems. Last week’s announcement that AbbVie Inc. (NYSE: ABBV) won the bidding war for Pharmacyclics Inc. (NASDAQ: PCYC) had many analysts shaking their heads in disbelief. The consternation was over the price, which at $261.25 per share for PCYC came to approximately $21 billion, about 27.8x revenue and 165.6x EBITDA. The real prize for AbbVie is Imbruvica, an effective treatment against a form of leukemia and other diseases that Pharmacyclics is marketing under an agreement with Johnson & Johnson (NYSE: JNJ). J&J and Pfizer (NYSE: PFE) were also in the final round of bidders. AbbVie’s shares fell nearly 6% on March 5, the day after the announcement, despite AbbVie CEO Richard Gonzalez’s assurances that Imbruvica can generate sales of $7 billion, after J&J takes its cut.
What U.S. Health Care Companies Are Buying Overseas
We’re hosting a webinar on March 12 called Cross-Border M&A: Opportunities and Issues. As a run-up to it, here’s a peek at what U.S. health care companies have bought overseas in 2015, excluding the typical pharma/biotech rights and licensing deals. We’ve seen 13 acquisitions of foreign companies so far, better than the 10 recorded in the same period in 2014. In the first two months of this year, $2.3 billion has been committed to those transactions. See the chart below.
Cross-Border Health Care Deals by U.S. Companies, 2015
Acquirer
Target
Price
Cyberonics Inc.
Sorin S.p.A.
$1.2 billion
Mylan Inc.
Famy Care women’s health busienss
$750 million
Biogen Idec
Covergence Pharmaceuticals
$200 million
Intrexon Corporation
ActoGeniX
$60 million
Lexmark International
Claron Technology
$37 million
Source: The Health Care M&A Information Source, March 6, 2015
Community Health Systems Buys into Five Oklahoma Hospitals
Community Health Systems, Inc. (NYSE: CYH) bought out its joint venture partner, INTEGRIS Health, to take full title to five hospitals in Oklahoma: Blackwell Regional Hospital (53 beds), Clinton Regional Hospital (56 beds), Marshall County Medical Center (25 beds), Mayes County Medical Center (52 beds) and Seminole Medical Center (32 beds). The five hospitals were previously owned through a joint venture between INTEGRIS and subsidiaries of Health Management Associates, Inc., which Community Health announced it would acquire in July 2013, for $7.6 billion. No price was disclosed on this deal.
Nikon Refocuses on Medical Devices
Nikon Corporation (T: 7731) is following its consumer electronics brethren, Canon, Inc. (NYSE: CAJ), FujiFilm (T: 4901), Olympus Corp. (T:7733), Pentax Corp. and Royal Philips (NYSE: PHG), into the health care industry. Last week it announced the acquisition of Optos. The $400 million price buys a Scottish medical device company that specializes in designing retinal-imaging machines used to test eyes and detect high blood press, and certain types of cancers………………..Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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