Week of May 21, 2018 | Vol. 7, Issue 20
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Managing Director
Business Development

Jeremy C. Johnson
Managing Director
Head of M&A and Capital Advisory

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.
Sivantos And Widex In $8 Billion Merger To Create No.3 In Hearing Aids
Widex and Sivantos are merging to cretae an industry number 3 that can invest more in digital devices and step up the challenge to market leaders. 

Germany's Sivantos, formerly known as Siemens Audiology, and Denmark's Widex said on Wednesday that they had agreed to form a company worth more than 7 billion euros ($8.3 billion), including 3 billion euros in debt.  Makers of hearing aids, whose customers are typically in their seventies and eighties, are benefiting from rising demand in aging societies, but some are facing challenges adapting to the digital age and the demands of more tech-savvy generations. "Innovation is one of the biggest areas of growth, and this is accelerating because we have a new group of consumers that is coming with a completely different mindset," Sivantos Chief Executive Ignacio Martinez told Reuters. The merger will enable the enlarged company to invest more in research and development (R&D) in areas such as bluetooth and sensors, he said. One of the technologies hearing aid makers are hoping will attract younger customers is the capture of healthcare data using sensors in the devices.

C ontinue Reading at Reuters .
Australia's Healthscope Gets $3.3 billion Brookfield Approach, Sparking Bid War Hopes
The scope, sets the scene for a takeover battle for the No. 2 Australian private hospital operator 
Canadian investment firm Brookfield Asset Management made a $3.3 billion approach for Australian hospital group Healthscope , trumping a local buyout proposal and sending shares of the target up to a two-year high on Monday. New Australian private equity player BGH Capital, led by former executives of TPG Capital Management and Macquarie Group Ltd
, made an approach worth $3.1 billion on April 26. Pension fund AustralianSuper is partnering BGH in that proposal. Healthscope shares rose 4.9 percent in a flat overall market by midsession. The stock was trading at A$2.59, its highest since April 2016, and higher than Brookfield's A$2.50 indicative bid, a sign investors expect a bidding war. "The entry of Brookfield adds to bidding tension and (I) expect the BGH-AustralianSuper consortium will most likely increase its offer bid," said Chris Kallos, a healthcare analyst at Morningstar.

C ontinue Reading at Reuters .

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.

 Pharma & Biotech
 23 transactions totaling $3,471 million 
 Supplies, Equipment & Services
 16 transactions totaling $2,549 million
 Healthcare IT & Managed Care
 6 transactions totaling $35 million
 Healthcare Facilities & Distributors
 12 transactions totaling $4,823 million

Pharma & Biotech
33 private placements totaling $621 million
Supplies, Equipment & Services
15 private placements totaling $117 million
Healthcare IT & Managed Care
10 private placements totaling $41 million
Healthcare Facilities & Distributors
1 private placements totaling $47 million

 Pharma & Biotech
 21 public offerings totaling $1,119 million
 Supplies, Equipment & Services
 9 public offerings totaling $1,514 million
 Healthcare IT & Managed Care
 3 public offerings totaling $169 million
 Healthcare Facilities & Distributors
 1 public offering

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.
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.
May 18, 2018 -  Reuters
Buyout fund CVC Capital has agreed to buy a majority stake in Mehilainen, one of Finland's largest healthcare companies, from private equity companies KKR and Triton. The companies, announcing the sale in separate statements on Friday, did not disclose the price but the Financial Times, citing unnamed sources, said the deal would be valued at 1.8 billion euros ($2.1 billion). Mehilainen had sales of 756 million euros last year.

May 17, 2018 -  Fierce Biotech
Finnish healthcare company Terveystalo has agreed to buy Swedish rival Attendo's  Finnish operations for 233 million euros ($275 million), it said on Thursday. Having indicated last week that it was considering a potential deal, Terveystalo said the acquisition includes Attendo's Finnish primary care, specialist care, staffing and dental operations.

May 17, 2018 -  BioSpace
As the opioid epidemic across the United States continues, the U.S. Food and Drug Administration (FDA)  approved a new treatment to help patients manage withdrawal symptoms  from opioid addiction. It is the first approved non-opioid treatment to manage withdrawal symptoms. The FDA approved Kentucky-based US WorldMeds Lucemyra (lofexidine hydrochloride) for the mitigation of opioid withdrawal symptoms in adults. Lucemyra, an oral, selective alpha 2-adrenergic receptor agonist that reduces the release of norepinephrine, was reviewed by the FDA under a priority review. Approval for the treatment was based on positive trial data that showed the medication significantly reduced the severity of withdrawal symptoms in comparison to placebo. 

Note to pharma: AI companies could use your help detailing doctors
May 16, 2018 -  Fierce Pharma
Artificial Intelligence companies are coming up with all kinds of ways to help pharma improve clinical trials, zero in on which patients will benefit most from their drugs and go well beyond the pill. So how can pharma return the favor? By convincing reluctant doctors to jump on board, for starters.  Drugmakers have lots of practice when it comes to helping wary clinicians accept change, which is something AI companies could use assistance with, Nathalie Le Prohon, healthcare VP at IBM Canada, said at a recent roundtable discussion in AI hub Montreal.

Emulate, Inc. and AstraZeneca Collaborate on Organs-on-Chips Technology
May 16, 2018 -  BioSpace
Privately-held Emulate, Inc. struck a deal with pharma giant AstraZeneca's Innovative Medicines and Early Development (IMED) Biotech Unit to embed its Organs-on-Chips technology within the laboratories of the IMED Drug Safety organization. In an announcement this morning, Boston-based Emulate said the agreement with AstraZeneca will accelerate the development of Organs-on-Chips technology and testing within the context of a pharmaceutical organization. AstraZeneca and Emulate have been collaborating on the Organs-on-Chips technology since 2013. The two companies published some of their recent work during the Society of Toxicology meeting in March 2018. AstraZeneca is the first pharmaceutical company to work with Emulate to develop and embed its Organ-on-Chips technology in its laboratories.

May 16, 2018 -  Reuters
Top animal health company Zoetis Inc will buy Abaxis Inc for $1.9 billion, looking to capture a bigger slice of the fast-growing market for diagnostics services that cater to household pets and farm animals. The deal announced Wednesday reflects Zoetis' expectation that the diagnostics category will grow at a faster pace than the broader animal health industry.
May 15, 2018 -  Reuters
Thomas DeRosa is making a $4 billion bet that he can build a national, low-cost healthcare network for America's aging population that will succeed where so many other models have struggled.  His secret: strip out the "for-profit" business model, and leverage the real estate in nursing homes for outpatient care.

May 14, 2018 -  The Wall Street Journal 
It isn't just the Federal Trade Commission scrutinizing U.S. health-care mergers these days. The Vatican is watching, too.  Some of the biggest recent deals  involve nonprofit hospitals affiliated with the Catholic Church, which make up about 8% of U.S. hospitals. Many began as small institutions founded by nuns more than a century ago. But as they have combined and grown  into large corporations, they are posing new moral quandaries for church officials, who have a say in which mergers go ahead.

May 14, 2018 -  Fierce Biotech
Bluebird bio has added  two targets and up to €417 million ($500 million) in milestones to its T-cell receptor (TCR) collaboration with Medigene. The expanded deal tasks Medigene with applying its TCR technology platform to additional target antigens of interest to Bluebird. Medigene began working with Bluebird in 2016, at which point the partnership covered four targets worth up to $250 million each in milestones. Bluebird entered into the alliance to access the fruits of technology designed to generate highly-active TCRs and thereby strengthen its immuno-oncology pipeline. Twenty months later, Bluebird has seen enough to justify broadening the agreement.

May 14, 2018 -  Fierce Biotech
On the heels of its $1.6 billion Armo acquisition, Eli Lilly is striking another oncology deal. This time, the company will hand over  $110 million up front for Aurka Pharma, a TVM Capital Life Science company set up to develop AK-01, an Aurora kinase A inhibitor currently in phase 1 for solid tumors. Aurora kinases are thought to play a key role in cell division by controlling chromosomal segregation. Errors in this process can lead to genetic instability, which is linked to tumor formation. Aurora kinases are overexpressed in cancerous tumors, Lilly said. AK-01 could potentially be a first-in-class drug, and if it's approved in the U.S. and other markets, AurKa could pick up as much as $465 million in regulatory and sales milestones, Eli Lilly said in a statement. 
Current Opportunities Available Through Bourne Partners
Project Limestone
Asset Divestiture
Southeastern US | ANDAs | ANDA Revenue disclosed with NDA

Project Ocean 
Sell-side M&A
Northeastern US | CDMO | Approximately $6mm Revenue | EBITDA disclosed with NDA

Project Barracuda
Asset Divestiture
Midwestern US | Consumer Health/OTC | Approximately $31.5mm Revenue | Approximately $12mm EBITDA

Project Longhorn 
Sell-side M&A
Southeastern US | CDMO | Approximately $85mm Revenue | Approximately $8mm EBITDA
Recent Reports Providing Insight Into Healthcare & Related Industries
An Overview of Events Hosted or Attended by the Bourne Partners Team
June 4 - 7, 2018  | Boston Convention Center |  Boston, MA
As an international, healthcare-focused merchant bank and financial advisory firm, we provide world-class services and capital to middle-market healthcare companies around the globe.  We aim to keep our clients well-informed of healthcare news and events.  With this additional insight in mind, together, we can recognize trends and opportunities that benefit our clients.  We hope that you will reach out to Bourne Partners to help execute your healthcare operational and transactional needs.  To learn more about our firm, visit our website or utilize the links below to engage with us on social media. 


The Bourne Partners Team

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