July 2024 Deal Wrap Up
A conversation with Andre Ulloa and Mark Thomas of M&A Healthcare Advisors
In July 2024, there were 175 healthcare transactions reported, marking an 8% increase from June 2024 when 162 deals were announced and a 4% from July 2023 when 168 healthcare acquisitions were reported. The deal volume of July 2024 accounts for nearly 15% of the 1,190 healthcare transactions announced since the start of 2024.
The most active sector was Other Services with 56 acquisitions. Other Services is a catch-all/miscellaneous sector that encompasses a variety of transactions from medical outpatient buildings (MOBs) to contract development manufacturing organizations (CDMOs). In July 2024, there were 19 MOB transactions, four infusion service acquisitions and two CDMO deals. The M&A volume announced during July 2024 is only slightly lower than that of June 2024, which saw 47 Other Services acquisitions.
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Earnings Week in Review Healthcare Giants Navigate Growth and Hurdles
We’re taking a look at some of the major companies reporting earnings in the week of July 15-July 19, across a variety of sectors. UnitedHealth Group and Novartis showcased strong growth, while Johnson & Johnson and Elevance Health presented more mixed results. Abbott Laboratories also reported solid results, driven by its medical devices segment, while facing challenges in its diagnostics business due to waning COVID-19 testing demand. This week's earnings reports offer insights into the broader healthcare industry's performance and future trajectory.
UnitedHealth Group
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UnitedHealth Group (UHG) demonstrated a significant turnaround in its second quarter of 2024, posting a $4.2 billion profit after a challenging first quarter that was marked by...................Continued on LevinPro HC
Some of the buyers that reported acquisitions in July 2024 include Montecito Medical Real Estate, Big Sky Medical and AW Property Company.
Montecito Medical Real Estate, a real estate investment firm based in Nashville, Tennessee, purchased a 27,000-square-foot MOB in Panama City, Florida for an undisclosed price. This is Montecito’s only acquisition during the month but its 13th transaction of the year.
Big Sky Medical, a Dallas-based real estate investment firm, made two purchases in July 2024, buying a 38,709-square-foot Class A MOB in Cedar Park, Texas and a 58,000-square-foot Class A MOB in San Antonio, Texas. Neither of the prices were disclosed. Throughout 2024, Big Sky Medical has completed five transactions.
North Palm Beach, Florida-based AW Property Com-
pany acquired a nine facility MOB portfolio in North Carolina. The portfolio consists of 309,424 square feet and was sold for $99.5 million. This marks the largest MOB deal of the month in terms of both purchase price and square footage.
Buyers in the infusion services space include Vivo Infusion, backed by InTandem Capital Partners, and Dynamic Infusion Therapy, LLC (DIT).
DIT acquired Infusicare, a Cream Ridge, New Jersey home-infusion provider that works on behalf of specialty pharmacies. This is DIT’s only transaction in July 2024, but in 2022 the company completed three acquisitions.
DIT is a full service, on-demand outsourced provider of vascular access insertion services with a proven clinical model that lowers costs for its customers and leads to better patient outcomes. In early 2021, RiverGlade Capital, a healthcare-focused private equity firm, partnered with DIT to build on its reputation for clinical excellence.
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Peter Harris, CEO & President of Dynamic, noted in the press release that "Infusicare is known for its quality of patient care. This transaction will allow Dynamic to reach central and northern regions of New Jersey.”
Vivo Infusion’s acquisition of Infusion Associates Managements, Inc. will bring Vivo’s presence to nearly 80 ambulatory infusion centers across 15 states. Financial terms of the transaction were not disclosed. TripleTree served as exclusive financial advisor and DLA Piper served as legal advisor to Infusion Associates.
Vivo Infusion is a provider of infusion and injection care for patients suffering from compromised immune systems, infectious diseases and other medical conditions. It is based in Lakewood, Colorado.
Andre Ulloa, Founder and Managing Director at M&A Healthcare Advisors offered insight into why infusion services has seen an uptick in transactions over the recent months.
“In short, the margins for infusion are substantial, there is limited competition from the large cap pharmaceutical companies and there is great growth potential in certain IV therapies, like neurological drugs,” said Ulloa. He seems to be optimistic that deal volume in the infusion services industry will continue to increase.
The largest purchase price in the CDMO market for July 2024 was Agilent Technologies Inc.’s acquisition of BIOVECTRA for $925 million. Agilent expects that the acquisition will be $0.05 dilutive to non-GAAP EPS in the first full year after closing.
Agilent provides bio-analytical solutions and services to the life sciences, diagnostics and genomics, chemical analysis, communications and electronics industries worldwide.
BIOVECTRA produces biologics, highly potent active pharmaceutical ingredients and other molecules for targeted therapeutics. BIOVECTRA delivered $113 million in revenue during 2023 and expects double-digit revenue growth in 2024, according to a July 22 press release on BusinessWire.
The second most active sector was Physician Medical Group (PMG) with 38 transactions. Typically, the PMG and Other Services sectors are the most active so this is not surprising. However, what is surprising is the fact that the PMG deal totals increased from June 2024 (31 transactions) and July 2023 (36) as some industry experts seemed to have indicated a slight decline in deal activity.
The most active PMG specialty was dental with 17 transactions, which is a slight decline from June 2024 when 19 were reported, but an increase from July 2023 when nine dental deals were announced.
In addition to speaking with Ulloa, we also spoke with Mark Thomas, Founder and Director of Operations at M&A Healthcare Advisors. He addressed the high activity in the dental market, noting that it seemed like he read about a dental transaction every other day, if not daily, which is a sentiment we share
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Deal Summaries: Services Home Health & Hospice
Signature HC at Home's assets N/A The Pennant Group, Inc. NASDAQ: PNTG 7/11/2024 $80,000,000 N/A Eagle, ID
In Brief: The acquired assets include the hospice and home health assets of Signature Healthcare at Home, a provider of home health and hospice services in the Pacific Northwest, with multiple locations throughout Oregon, Washington and Idaho. Signature employs a team of more than 650 dedicated home health and hospice staff, with annual revenue of approximately $78 million, home health admissions of more than 12,000 and an average daily hospice census of more than 300, each over the trailing twelve months.
Rotech Healthcare OTCMKTS: Owens & Minor, Inc. NYSE: OMI 7/23/2024 $1,360,000,000 Orlando, FL OHIQ Mechanicsville, VA
In Brief: Rotech is one of the largest providers of home medical equipment and related products and services in the United States, with a comprehensive offering of oxygen, other respiratory therapy equipment, wound care equipment and supplies and diabetes devices and supplies. The company is based in Orlando, Florida.
Deal Summaries: Services Hospitals
Laveen, AZ San Francisco, CA
In Brief: Arizona General Hospital is an acute care hospital in Laveen, Arizona. Spanning 39,000 square feet, the hospital features 16 inpatient rooms, two state-of-the-art operating rooms for inpatient and outpatient surgical procedures, an emergency department, a high-complexity laboratory and a full radiology suite offering the latest digital technologies. The deal also includes seven freestanding emergency departments in the Phoenix metropolitan area.
3
Scranton, PA; Wilkes-Barre, PA Lahaska, PA
In Brief: The deal includes the three hospitals and related businesses, all of which make up Commonwealth Health, a subsidiary of Community Health Systems. The hospitals are Regional Hospital Of Scranton (186 beds), Moses Taylor Hospital (122 beds) and WilkesBarre General Hospital (369 beds).
Deal Summaries: Services Laboratories, MRI and Dialysis
Etobicoke, Ontario Secaucus, NJ
In Brief: LifeLabs is a Canada-based provider of laboratory diagnostic information and digital health connectivity systems, enabling patients and healthcare practitioners to diagnose, treat, monitor and prevent disease. The company operates Canada's first commercial genetics lab, and the country's largest online patient portal, with more than 8 million Canadians receiving their results online.
Deal Summaries: Services Managed Care
ConnectiCare, Inc. Not-for-Profit Molina Healthcare, Inc.
7/23/2024 $350,000,000 Farmington, CT Long Beach, CA
In Brief: ConnectiCare is a leading health plan in the state of Connecticut serving approximately 140,000 members across Marketplace, Medicare and certain commercial products as of June 30, 2024.
Deal Summaries: Services Other Services
9 MOBs in North Carolina N/A AW Property Company Private 7/9/2024
$99,500,000 North Carolina North Palm Beach, FL
In Brief: The acquired assets include a portfolio of nine medical outpatient buildings (MOBs) in North Carolina, with six properties in Greensboro and one in Burlington. Two other facilities are in Durham, about 60 miles east of Greensboro. The largest building in the nine-MOB portfolio is the 95% occupied, 68,672-square-foot Church Street Medical building in Greensboro, which includes a surgery center. The MOB properties have a total of 309,424 square feet of space and are being sold for $321 per square foot.
Augmedix
NASDAQ: Commure Private 7/19/2024
$139,000,000 San Francisco, CA AUGX San Francisco, CA
In Brief: Augmedix converts natural clinician-patient conversation into medical documentation and provides live support, including referrals, orders and reminders for clinicians. Augmedix services are compatible with over 35 specialties. According to its 2023 full year annual report, Augmedix's total FY 2023 revenue was $44.9 million, and EBITDA was a loss of approximately $16.8 million. BIOVECTRA
Charlottestown, Prince Edward Island Santa Clara, CA
In Brief: BIOVECTRA is a specialized contract development and manufacturing organization. BIOVECTRA produces biologics, highly potent active pharmaceutical ingredients and other molecules for targeted therapeutics. BIOVECTRA delivered $113 million in revenue during 2023 and expects double-digit revenue growth in 2024, according to a July 22 press release on BusinessWire.
Hamilton Thorne
OTCMKTS: Astorg
Private 7/22/2024
$282,000,000 Beverly, MA HTLZF Paris, France
In Brief: Hamilton Thorne is a global provider of precision instruments, consumables, software and services that reduce cost, increase productivity, improve results and enable breakthroughs in assisted reproductive technologies and developmental biology research markets.
Deal Summaries: Technology
CureVac’s vaccine assets N/A GSK Plc
Biotechnology & Pharmaceuticals
NYSE: GSK 7/3/2024
$430,000,000 N/A Brentford, United Kingdom
In Brief: The acquired assets include CureVac’s vaccines against influenza and COVID-19. CureVac is a German biopharmaceutical company focused on developing therapies based on messenger RNA. Founded in 2000, the company has approximately 375 employees.
Morphic Holding Inc.
NASDAQ: Eli Lilly and Company
NYSE: LLY 7/8/2024
$3,200,000,000 Waltham, MA MORF Indianapolis, IN
In Brief: Custom Health provides a comprehensive technology-enabled medication management and managed care solution, resulting in 98% medication adherence for its patients across the United States and Canada. The company is focused on serving poly-med patients with chronic conditions, representing an estimated market of 78 million adults in North America.
APEIRON Biologics AG Private Ligand Pharmaceuticals Inc.
NASDAQ: LGND 7/8/2024
$100,000,000 Vienna, Austria La Jolla, CA
In Brief: APEIRON Biologics AG, a biotech, focuses on in-licensing biological and immunological approaches to treat various cancers and related conditions. The company holds royalty rights to QARZIBA® (dinutuximab beta) for the treatment of high-risk neuroblastoma.
Deal Summaries: Technology Biotechnology & Pharmaceuticals (cont'd)
Valinor Pharma Private Grünenthal GmbH Private 7/22/2024
$250,000,000 Chicago, IL
Aachen, Germany
In Brief: Valinor Pharma is a pharmaceutical company focused on innovative commercialization of medicines, including its product Movantik® (naloxegol). Movantik® is indicated for the oral treatment of opioid-induced constipation in adult patients with chronic noncancer pain.
Bharat Serums & Vaccines Lmtd. Private Mankind Pharma Private 7/26/2024
$1,640,000,000 Mumbai, India
New Dehli, India
In Brief: Bharat Serums and Vaccines Limited is a biopharmaceutical company focused on women's healthcare, assisted reproductive treatment, critical care and emergency medicine in India and emerging markets. According to the original deal press release from July 26, 2024, BSV reported revenues of INR 1,723 crore (approximately $204 million) in FY 2024.
Nerio Therapeutics Private Boehringer Ingelheim Private 7/29/2024
$1,300,000,000 La Jolla, CA
Ingelheim, Germany
In Brief: Nerio Therapeutics is a biotechnology company focused on the life sciences sector. It was founded in 2019 and is based in La Jolla, California. Nerio has been working on small molecules that inhibit protein tyrosine phosphatases N1 and N2 (PTPN1 and PTPN2). PTPN1 and PTPN2 regulate cytokine signaling and T cell receptor signaling, with preclinical research suggesting inhibiting them can enhance anti-tumor activity.
Ironshore Therapeutics Private Collegium Pharmaceutical NASDAQ: COLL 7/29/2024
$525,000,000 Morrisville, NC; Camana Bay, Cayman Islands Stoughton, MA
In Brief: Ironshore Therapeutics is a privately held, pharmaceutical company that markets and distributes Jornay PM (methylphenidate HCl), a central nervous system stimulant prescription medicine for the treatment of attention deficit hyperactivity disorder in people six years of age and older and the only stimulant medication that is dosed in the evening.
Deal Summaries: Technology
BELKIN Vision
Private Alcon, Inc.
NYSE: ALC 7/1/2024
Medical Devices
$65,000,000 Yavne, Israel Hunenberg, Switzerland
In Brief: BELKIN Vision is an Israeli medical device company, established in 2013. BELKIN Vision has developed a non-contact automated glaucoma laser therapy accessible to all ophthalmologists.
EsophyX Z+ device Private Merit Medical Systems, Inc. NASDAQ: MMSI 7/2/2024
$105,000,000 N/A South Jordan, UT
In Brief: The acquired asset is the EsophyX Z+ device from EndoGastric Solutions. The EsophyX Z+ allows physicians to offer a nonpharmacological alternative, treating gastroesophageal reflux disease by restoring the body’s reflux barrier. EndoGastric Solutions generated about $26 million in revenue from the product during 2023.
JenaValve Technology, Inc. Private Edwards Lifesciences NYSE: EW 7/24/2024 $1,200,000,000 Irvine, CA Irvine, CA
In Brief: JenaValve Technology is a medical device company developing the first transcatheter heart valve technology that is uniquely designed for the minimally invasive treatment of aortic regurgitation. It is based in Irvine, California. The deal also includes Endotronix, a digital health medtech company developing an integrated platform to provide comprehensive, reimbursable health management tools for patients suffering from advanced heart failure.
