Week of December 11, 2017 | Vol. 6, Issue 48
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Managing Director
Business Development

 
Jeremy C. Johnson
Managing Director
Head of M&A and Capital Advisory
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.
UnitedHealth To Buy DaVita Inc.'s Large Doctor Group For $4.9 Billion
Insurer's Optum unit has been building up roster of physician practices and clinics

UnitedHealth Group Inc. will buy DaVita Inc.'s physician group for about $4.9 billion in cash, in the latest sign of how the parent of the biggest U.S. insurer is rapidly expanding its role as a health-care provider. UnitedHealth's deal for one of the nation's biggest doctor groups, coming the same week as pharmacy giant CVS Health Corp. sealed its $69 billion deal  to buy insurer Aetna Inc., underscores how health-care companies are forging deeper into segments outside their traditional core businesses. The CVS combination would unite drugstores, a pharmacy-benefit manager and insurance to build an integrated health care company without a foundation of doctors. That deal stands in contrast to the UnitedHealth mix, which involves a PBM in addition to health coverage and, now increasingly, physicians. Kidney-care provider DaVita had previously said that it was "pursuing strategic alternatives" for its physician operation, which has had bumpy financial results and recently surprised investors by driving down earnings for DaVita, which recorded a net loss in the third quarter.

C ontinue Reading at  The Wall Street Journal.
Stryker Beefs Up ENT Business With $662 Million Entellus Buy
Medical device maker Stryker Corp said on Thursday it would buy Entellus Inc, adding heft to its ear, nose and throat (ENT) business

Stryker would pay $24 per Entellus share, a premium of about 50 percent to Entellus's Wednesday close. Entellus shares jumped 53.7 percent to $24.60 in premarket trading.  Plymouth, Minnesota-based Entellus designs minimally invasive products for the treatment of various ENT diseases. The company generated revenue of $23 million in the third quarter. Entellus's portfolio of ENT devices like dilation system XprESS and nasal implant Latera would complement its instrument business, Stryker said. The deal is expected to be dilutive to Stryker's 2018 adjusted net earnings by about 4 cents per share, but accretive thereafter, the company said. Guggenheim Securities was financial adviser to Stryker, while Piper Jaffray & Co advised Entellus.

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
 12 transactions totaling $824 million 
 Supplies, Equipment & Services
 25 transactions totaling $6,195 million
 Healthcare IT & Managed Care
 8 transactions totaling $69,461 million
 Healthcare Facilities & Distributors
 11 transactions totaling $65 million





Pharma & Biotech
21 private placements totaling $492 million
Supplies, Equipment & Services
10 private placements totaling $42 million
Healthcare IT & Managed Care
8 private placements totaling $58 million
Healthcare Facilities & Distributors
3 private placements totaling $2 million



 Pharma & Biotech
 15 public offering totaling $2,227 million
 Supplies, Equipment & Services
 5 public offerings totaling $150 million
 Healthcare IT & Managed Care
 3 public offerings totaling $87 million
 Healthcare Facilities & Distributors
 0 public offerings


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.
RECENT INDUSTRY HEADLINESRecentIndustryHeadlines
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.
December 8, 2017 -  Fierce Biotech
After its $12 billion buyout of Kite this year for its new class of immuno-oncology therapy, Gilead has made a much smaller bolt-on acquisition of Cell Design with an eye to the future of CAR-T.  The buy, costing $567 million  all told (using biobucks and including the shares of Cell Design Labs already held by Kite), will go towards building the next-gen CAR-T programs to boost what Kite has already created.

December 7, 2017 -  Fierce Biotech
We've spoken a lot about NASH this week-this year in fact. Yet Metacrine is seeing us talk about it again after completing a series B as it aims to combat the fatty liver disorder.  You know the drill: Potential tens of billions in market share from next decade; about a dozen biopharma from phase preclinical to 3 are at work using several different MOAs; caution from some on diagnostics and targets (i.e., liver fat and fibrosis) alongside some mixed results, and so on.

December 6, 2017 -  Fierce Biotech
Amorchem II Ventures launched its second venture capital fund with $44.2 million in backing from the likes of the Quebec government and Merck. This brings the total managed by the AmorChem Group to $86 million. Geared toward seed-stage investing, the new fund will target life sciences projects from Quebec-based universities and research centers. The Quebec government and Merck, along with Fonds de solidarit√© FTQ, also funded Amorchem's first fund in 2011. 

Cambridge Biotech Obsidian Launches With $49.5M Investment From Google, Takeda, Vertex, Amgen and Others
December 6, 2017 -  BioSpace
Obsidian Therapeutics officially launched with the completion of a Series A financing worth $49.5 million. The company was founded in 2015 by Atlas Venture,  who provided exclusive funding through mid-2017. Obsidian is focusing on immuno-oncology, and includes regulated cytokine cassettes to be used with CAR-T products. These enhance anti-tumor activity and cellular persistence, and provide regulated CAR-T cells to improve safety and anti-tumor efficacy. In this area, the company uses destabilizing domains (DD), which was developed by the Obsidian's scientific founder, Thomas Wandless, a professor of Chemical and Systems Biology at Stanford University. 

Amgen, Carmot ink backloaded $240M Parkinson's pact  
December 6, 2017 -  Fierce Biotech
Amgen has struck a deal with Carmot Therapeutics worth a potential $240 million. The alliance tasks Carmot with using its lead-identification technology to provide Amgen with a stream of prospects against conditions including Parkinson's disease.  In return for an upfront payment, research funding and milestones that could top out above $240 million, Amgen will get the chance to work with Carmot to select therapeutic targets and pick out drug candidates to move into human testing. Amgen has the option to select multiple targets and will assume full control of the programs in the clinic and beyond.
PARTNERING AND M&A OPPORTUNITIESUpcomingEvents
Current Opportunities Available Through Bourne Partners
Project Longhorn 
Sell-side M&A
Southeastern US  |  CDMO  |  Approximately $85mm Revenue  |   Approximately $8mm EBITDA

Project Crimson 
Sell-side M&A
Southeastern US  |  CMO  |  Approximately --- Revenue  |   Approximately --- EBITDA

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

Project Magnolia 
Sell-side M&A
Mid-Atlantic US  |  CRO  |  Approximately $25mm Revenue  |   Approximately NM EBITDA

Project Barracuda 
Sell-side M&A
OTC Product  |  Approximately $31mm Revenue  |   Approximately $12mm Contribution Margin
UPCOMING EVENTSUpcomingEvents
An Overview of Events Hosted or Attended by the Bourne Partners Team
36th Annual J.P.Morgan Healthcare Conference
January 8-11, 2018 | San Francisco, CA
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. 

Sincerely,

The Bourne Partners Team

Bourne Partners
550 South Caldwell Street
Suite 900
Charlotte, NC 28202
704-552-8407