Week of October 8, 2018 | Vol. 7, Issue 40
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In This Issue
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Contact Information
Managing Director
Business Development
Jeremy C. Johnson
Managing Director
Head of M&A and Capital Advisory
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INDUSTRY M&A SNAPSHOT
Above is an overview of recent industry M&A activity. For additional information, see the charts below or follow the link to the left to download complete transaction tables broken out by industry subsectors.
See below for additional information about industry trading comps and transaction relevant articles from the past week.
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Texas Hospital Giants Baylor Scott & White And Memorial Hermann Plan To Merge
The combination would be among the largest U.S. systems, by number of hospitals, with annual revenue of more than $14 billion.
Two Texas hospital giants announced they plan to merge, which would combine dominant hospital systems in two of the nation's largest metropolitan markets, one of the latest signs of the consolidation
reshaping the health-care industry. Baylor Scott & White Health, a nonprofit based in Dallas, and Memorial Hermann Health System, based in Houston and also a nonprofit, announced a letter of intent to create a 68-hospital system spanning from the Gulf of Mexico to the Oklahoma border.
The combination would be among the largest U.S. systems, by number of hospitals, with annual revenue of more than $14 billion. With that size comes potential for greater efficiency and savings that can be invested to catch up with market demand for less costly and more convenient care, the hospital systems' executives said in a joint interview."The means is to create economies" of scale, said Baylor Scott & White Chief Executive Jim Hinton. "The end, the more important end, is to improve care and invest in digital and ambulatory and other modes of care." Mr. Hinton would be named CEO following the merger, which could close as soon as July.
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Blackstone Buys Clarus To Bulk Up In Life Sciences
Blackstone Group LP said on Thursday it has agreed to acquire life sciences investment firm Clarus, in an effort by the world's largest alternative asset manager to scale up its investments in healthcare.
Terms were not disclosed. The push into life sciences is one of Blackstone's new strategic initiatives under Jon Gray, who was promoted to president and chief operating officer earlier this year. Blackstone already manages $439 billion across alternative assets such as private equity and real estate, and is looking for ways to grow further. "This is a platform we will build on in the life sciences area," Blackstone's global head of private equity, Joe Baratta, said in a telephone interview. The acquisition kicks off Blackstone Life Sciences, which is the New York-based firm's effort to put more money into research funding where its sees a gap due to the retreat by larger pharmaceutical companies under earnings pressure.Blackstone will initially have two investment areas: partnering up with major pharmaceutical companies to help fund elements of research and development programs they do not want to focus on; and growth equity investments that typically fund growing companies past the venture capital stage of fundraising.Clarus, based in Cambridge, Massachusetts, has raised $2.6 billion since its founding, according to Blackstone.Clarus is currently investing out of a $900 million fund, and the successor fund is expected to be "meaningfully larger," Baratta said, without giving an exact number.
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Below are summaries and charts with the past week's transactions from the different healthcare sectors. For a detailed table showing data for each industry transaction click on any of the charts or use the download link above. Total transaction values are provided in USD millions.
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Pharma & Biotech
12 transactions totaling $1,271million
Supplies, Equipment & Services
2 transactions
Healthcare IT & Managed Care
3 transactions
Healthcare Facilities & Distributors
0 transactions
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Pharma & Biotech
24 private placements totaling $597 million
Supplies, Equipment & Services
2 private placements totaling $54 million
Healthcare IT & Managed Care
12 private placements totaling $58 million
Healthcare Facilities & Distributors
0 private placements
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Pharma & Biotech
12 public offering totaling $1,606 million
Supplies, Equipment & Services
0 public offerings
Healthcare IT & Managed Care
0 public offerings
Healthcare Facilities & Distributors
0 public offerings
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Each week, w
e provide updated trading
comps for leading comp-
anies from numerous healthcare subsectors.
To the right you will see a high-level breakdown of median revenue and EBITDA multiples for each of the specific sub sectors.
For a complete trading comp analysis (including the individual equities that comprise the sub sectors), click on the table to the right or use the download link from the top of this newsletter.
Note: data reflects prior week close.
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RECENT INDUSTRY HEADLINES
A Sampling of Relevant Industry Headlines from the Last Week
Below are snippets from relevant industry news articles from the past week. For additional information or the article's complete text, click the headline link to view the original publication.
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October 5, 2018 - Bio Space
Yesterday, Evotec AG (EVT) announced that Sanofi will be participating in an organized Public Private Partnership (PPP) that involves the initiation of brand newly formed BRIDGE, or LAB031, which was created to further the discovery of therapeutic drugs in multiple areas.
October 5, 2018 - Fierce Biotech
Orchard Therapeutics has filed to raise $173 million (€150 million) in an IPO. The offering will give the GlaxoSmithKline-backed biotech the means to take three gene therapies through the clinic and onto the market. Transatlantic biotech Orchard established one of the broadest clinical-phase gene therapy pipelines in the industry earlier this year when added GSK's portfolio to its existing assets
October 4, 2018 - Fierce Pharma
The group of about 130 shareholders, including alumni of the Japanese drugmaker, requested that Weber serve up details on how Takeda plans to pay down the debt it'll incur with the $62 billion acquisition. It also wants to know why Takeda offered a 65% premium for the rare-disease-focused target, and it's asking for board-meeting minutes and executive statements, too, Nikkei Asian Review reports.
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