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News archive

12 July 2010

Healthcare sector comment - July 2010

Welcome to Clearwater’s latest report on mergers and acquisitions activity in the healthcare sector, covering transactions in the second quarter of 2010.

Our most recent transaction in the sector was the sale of the mobility & rehabilitation businesses by DCC plc to Patterson Companies Inc of the US. Our international offices have also been active in the sector. Recent transactions have included the sale of a US based sleep disorder diagnostics business, advising an Indian based pharmaceutical group on the acquisition of a generic pharmaceutical product and the sale of a Danish domiciliary care business.

An area that is of particular interest over the next 12 months from an M&A perspective is the residential childcare market, with a number of players in the market considering an exit or looking to implement the next stage of their growth plans. The current challenges to the business model are around future demand and social care budget squeezes. Companies should be seeking to consolidate their market position both through organic growth and through acquisition. So, where will the underlying organic growth come from? Is it through increasing market share, by providing services to ensure higher quality outcomes, or by developing other niche services in prime locations? Whatever the strategy, companies that will survive will be businesses who have good visibility of long term contracts, diversified income streams, good incumbent operational teams, embedded relationships with commissioners, mixed services that are not sub-scale, and companies who can absorb further regulatory or training cost requirements.

And who are the buyers who will consolidate the market? They will include similar service providers who want to increase market share, adult residential care and specialist child education providers looking to diversify into other services, and potentially opportunistic property backed or social care housing providers. Private equity investors may also find that this is the right time to invest in the sector and consolidate the market by backing a strong operational management team.

Deals


Aesica Pharmaceuticals has acquired R5 Pharmaceuticals for an undisclosed amount. R5 develops and manufactures new medicines and clinical trial materials.

Lifeways Group has acquired Autism Solutions, for an undisclosed sum, Autism Solutions provides supported living for individuals with autistic spectrum conditions.

Primary Health Properties PLC has acquired Health Investments Ltd for a consideration of £39m. Health Investments Ltd is the UK based provider of primary care and pharmacy properties.

Sunflower Healthcare Group has acquired Huddersfield Nursing Homes from Doncaster based Trust Care for a cash consideration of £2.9m.

Blackstone Group Holdings has acquired Independent Clinical Services Ltd (ICS) from Inflexion for a minimum consideration of £110m. ICS is the UK based provider of temporary nursing staff on a short term, last minute and emergency basis.

Patterson Medical Inc (US) has acquired the mobility and rehabilitation businesses from DCC plc, for a cash consideration of £31m.

General Healthcare Group Limited has acquired Abbey Hospitals Limited from Covenant Healthcare Group Ltd, for an undisclosed consideration. Abbey Hospitals owns and operates four independent private hospitals.

Oxeco Plc has agreed to acquire Tissue Regenix Limited in a reverse takeover transaction.

Caretech Holdings plc, provider of residential care services, has acquired Greenfields Care Group Ltd, for an undisclosed consideration. Greenfields specialises in delivering positive outcomes for children with emotional and behavioural disorders.

General Healthcare Group has acquired a 42% stake in Transform. Transform is one of the countries largest cosmetic surgery companies.

Centocor Ortho Biotech Inc, a subsidiary of Johnson & Johnson, has acquired RespiVert Ltd from Advent Venture Partners and SV Life Sciences UK, for an undisclosed consideration.RespiVert is a UK based biotechnology company engaged in the discovery and development of novel inhaled therapies for asthma and chronic obstructive pulmonary diseases.

Capita Group Plc has acquired Premier Medical Group Ltd from Nomura Private Equity, for a total cash consideration of £60m. PMG provides medical reporting and screening services across the UK.

Surgicare has acquired Bristol-based Plastic Surgery Partners for a reported seven figure sum.

Allied Healthcare Group has acquired a majority share in Homecare Independent Living Group, for a total cash consideration of £3.9m. Homecare Independent Living Group is a domiciliary care, supported living and social housing care business.

AAC Capital Partners has acquired Martindale Pharmaceuticals Limited, the UK based pharmaceutical company, from Cardinal Health Inc, for an approximate consideration of £100m. Martindale Pharmaceuticals is the UK’s leading maker of Methadone in the UK.

Suzano Papel e Celulose has acquired Futuragene(FGN) Plc. The implied equity value of the transaction is approximately £50.6m. FGN is a leading agricultural biotechnology company focused on research, development, and commercialization of technologies.

Sovereign Capital Partnershas acquired Sterling Homecare Ltd for an undisclosed consideration. Sterling Homecare is a domiciliary care business and represents a bolt-on acquisition for Sovereign’s portfolio company, London Care.

August Equity’s portfolio company Enara Group Ltd has acquired six businesses, comprising Somebody Cares, Community Careline Peacehaven, Care 4 Agency, Homelink Care Services and Capital Care Ltd, for undisclosed considerations.

Gold Medal Acquisitions UK, an acquisition vehicle formed by SV Life Sciences and The Halifax Group, has acquired all the outstanding shares in Fulcrum Pharma Plc, a drug development company. The implied equity value of the transaction is approximately £10.41m.

Caretech Holdings plc a provider of residential care services, has acquired Family Assessment Services Limited, for an undisclosed consideration.

Cambian Healthcare Ltd has acquired Churchill London Clinic, an independent mental health facility, from Covenant Healthcare Rehabilitation Services Limited, for an undisclosed consideration.

Cozart Bioscience Limited a subsidiary of Inverness Medical Innovations Inc, has acquired Quantum Diagnostics Group (QDG) Limited, from James and Tamsin Lawson (private investors), for a total consideration of £5m. QDG is a medical diagnostic company specialising in the development, manufacture and marketing of a range of drugs of abuse detection devices.

Summit Medical has acquired Germany’s Eska Implants for an undisclosed consideration.

Lyceum Capital’s portfolio company Carewatch Care Services Ltd has acquired three bolt on businesses. The three businesses acquired are All & Small Ltd, Carewatch North Tyneside and Carewatch Swansea, for an undisclosed amount.

ISIS Equity Partners has completed a £3.75m replacement capital transaction in Surgi C Ltd. Surgi C is the UK's leading independent distributor of spinal implants.

Cinven portfolio company Spire Healthcare has acquired the London Fertility Centre for an undisclosed sum.

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