M & A News In The Healthcare Industry Sector
The report below provides a good overview of the fourth quarter M&A activity in the Healthcare Industry Sector.
M&A activity for North American based target companies in the Healthcare sector for Q3 2017 included 183 closed deals, according to data published by industry data tracker FactSet.
National health expenditures are projected to grow at a rate of 5.6% on average per year according to the U.S. Office of Actuary. The country’s aging population is expected to contribute significantly to that spending growth.
Industry Indicators
- US consumer prices for medical care commodities, an indicator of healthcare costs, increased 2.4% in August 2017 compared to the same period in 2016.
- US consumer prices for medical care services, an indicator of profitability for healthcare services, rose 1.6% in August 2017 compared to the same month in 2016.
- Total US revenue for healthcare and social assistance rose 3.4% in the second quarter of 2017 compared to the previous year.
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Industry Update
The use of telemedicine in US health care networks is rapidly growing, but the extent of treatment varies widely due to differences in state coverage policies. Currently, 48 states and Washington, DC, include some form of live video reimbursement in their Medicaid fee-forservice models. While states are gradually expanding laws and program guidelines to cover more telehealth services, reimbursements are often restricted to certain types of care. Most states don't allow reimbursement for store-and-forward (data transmission) and remote patient monitoring services.
Only a few states allow telehealth to fulfill insurers' "network adequacy" standards – mandates on how many physicians and facilities must be included in a coverage network to ensure proper care, according to California Healthline. Regardless, health networks are steadily increasing use of telehealth tools to fulfill value-based care initiatives. For California health network Kaiser Permanente, a majority of patient interactions now occur through online portals, apps, or virtual visits.
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Transactional Overview
Notable closed lower middle market transactions for the period in Healthcare sector include:
September 2017 – Dynatronics Corp. acquired Bird & Cronin, Inc. for US$15.5 million in cash, convertible preferred stock and contingent payout. Under the terms of transaction, Dynatronics Corp would pay US$10 million in cash, US$4 million in convertible preferred stock, an earn out payment ranging from US$0.5 million to US$1.5 million. Dynatronics Corp. manufactures and distributes technology medical devices, treatment tables and rehabilitation equipment. Bird & Cronin manufactures and distributes orthopedic products.
June 2017 - Saol International Ltd acquired Venus Biotherapeutics Sub LLC, a subsidiary of Aptevo BioTherapeutics LLC, ultimately owned by Aptevo Therapeutics Inc, for US$74.5 million. Under the terms of transaction, Saol International Ltd would pay an upfront payment US$65 million and an additional US$7.5 million related to the achievement of certain gross profit milestones and may receive up to US$2 million related to collection of certain accounts receivable after closing. Saol International operates as an investment holding company. Venus Biotherapeutics provides therapeutic products.
July 2017 - Grifols Innovation & New Technologies Ltd, a subsidiary of Grifols SA, acquired a 44% minority stake in GigaGen Inc for US$35 million in cash. The acquisition would strengthen Grifols Innovation & New Technologies’ research and development portfolio. Grifols Innovation & New Technologies provides research and experimental development services in biotechnology sector. GigaGen offers single cell droplet technology to clinical researchers and physicians.
Source - CFA
Collectively, the Alcor Mergers and Acquisition provides M&A advice to public and private companies in all sectors of the healthcare industries, including healthcare information technology, medical devices, pharma, surgical equipment and supplies, biotechnology, assisted living and long term care.
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ALCORs Growth Solutions for Business Helps Corporate Companies in the Areas of Investment Banking, M&A, Private Equity and Corporate Finance.
ALCOR provides a one-stop solution in Investment Banking with world-class corporations and companies as its clientele. ALCOR expertise spans the spectrum of finance - Mergers & Acquisitions, Equity Financing, Debt Financing, ECB, Financial restructuring, and investment banking advisory. ALCOR has footprints across the globe and an extensive presence in India with over 48 regional offices. ALCOR serves a wide cross section of verticals, some of which are the following: Automotive, Power, Telecom, Electronics, Software, Real Estate, and Education.
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True to its global stature as a leader, ALCOR's business philosophy is driven by highest levels of integrity and honesty at the heart of business. ALCOR obeys and complies with the rules of the land . ALCOR’s erudite Directors are from Harvard, Oxford and other prestigious institutions. The execution Team comprises of internationally reputed and highly experienced finance personnel.
ALCOR leverages its strong global footprint and the value of its international board of advisors to provide its clients with high growth transactions across the globe. We use our international deal-making experience to deliver customized advice to clients on each transaction. We assist clients in evaluating international and domestic Acquisitions and Joint Ventures. Global Fortune 500 companies work with ALCOR to assess suitable targets across the globe for market entry or market share expansion. ALCOR solutions include Mergers & Acquisitions, sell side, & buy side advisory, leveraged buyouts & other types of corporate restructuring. Standing aloft with over a 100 man-years in cross-border M&A advisory & independent research & experience, ALCOR, delivers maximum value from their transactions. ALCOR understands the clients' unique business needs, keeping their objectives a top priority. We work with our clients closely, often over five years, to help the client realize the value of their value creation strategy. ALCOR's wide range of product offerings are tailor made to suit client growth requirements.
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ALCOR worldwide team allows for targeted search, scenario mapping, synergy realization, and detailed road map with experience-driven cross-border M&A advisory that can be customized with minority buy-in, acquisitions, or even a 50:50 joint venture.
ALCOR uses strategic tools such as the Balanced Scorecard with tailored precision to define the following -
- Core defense
- Global customer revenue model
- Strategic high growth market entry.
- 360-degree growth model
- Intangible value proposition .Core foundation pillars
- Evolved value chain integration .Low cost global value partnerships and several other strategies.
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Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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Corporate Finance
How Combining deep financial expertise helps the CFO/CEO maximize value.
The role and responsibilities of the CFO have evolved dramatically. Once limited to the finance function, the CFO is now, more than ever before, a strategic partner accountable for creating value across the entire business. We have the expertise to support CFOs as they transform the finance organization, shape portfolio strategies, undertake major investment and financing decisions, and communicate with investors.
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The CFO challenge
Boards view CFOs as the most important corporate executive after the CEO. But in today's business environment, CFOs face new challenges. Corporate performance is increasingly tightly managed. Risks, including cyber issues, are growing. People within the business have higher expectations, especially when it comes to data and advanced analytics and the impact on value creation from disruptive business models. And it can be a struggle to deliver the best service in finance at minimum cost.
Our deep understanding of the finance function and expertise in specific industries uniquely positions us to support the CFO .
CFOs play a crucial role in aligning stakeholders so everyone sees value creation through the same lens. As the CFO is also at the helm of value-creation efforts company-wide, he or she can use the finance function to test new ideas and set best practices.
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We support our clients in several areas:
:: Investment Banking :: Corporate Finance :: Mergers and Acquisition Advisory
:: Joint Venture Advisory :: Private Equity :: Debt Financing
About ALCOR Mergers and Acquisitions
Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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JOINT VENTURES AND PARTNERSHIPS
A lucrative way for minimizing the risk of company expansion is to pool funding options with your competitor and form a joint venture. It can typically last for either one project or a group of projects but depending upon your investment, a joint venture might bring greater ROI and will allow you to achieve your business goals more quickly so that you can take on larger projects. Typically, at the time of expansion, most entrepreneurs face a dilemma: To differentiate themselves from their competitors, they should add a new product/service, a contract or a new market twice the size they have done before. But they require huge investment for such kind of business expansion, and there is no guarantee that this investment will pay off.
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It has been seen that joint ventures are a trendy way to allocate the cost of expanding the business into new territory. A joint venture (JV) is considered to be an incorporated entity, in which each organization which is participating primarily depends for the entity’s debts and actions. However, unlike a merger, a JV is short-term and often sold or dissolved on project completion that brings both partners together. At a time, it might happen that your friend can actually be your competitor or at least, an organization is related to the same business line like supplier. Many businesses that are expanding find pooling resources with either one or more partners for creating a JV is the best way for minimizing risk while assisting each partner to boost both revenues and expertise. In any partnership whether long-term or temporary, mutual trust and compatibility might make or break the deal.
Pros of JVs
- The combined ROI from both venture partners is anticipated to be greater than the ROI they will be getting independently.
- For independent small organizations, joint ventures make help them in participating on larger projects.
- Resources from different organizations might help in achieving objectives and goals more effectively and quickly than resources from one.
- Venture partners can get information about adopting each other’s best practices.
- JV partners can get control on each other resources and technologies.
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Cons of JVs
- JV partners can get control on each other resources and technologies.
- Entering into a JV needs the resource diversion from one’s current business.
- There are failure risks due to compatibility problems and liability for mistakes done by partners.
- JV is unlikely to succeed if both the partners are not committed deeply to the joint operations.
Now the question arises which comes first: the opportunity of business expansion, or the JV that will help in expansion? The situation varies in either of the conditions. You may already have product prototype but cannot afford hiring technical experts required for refining that product. Or you can also form a JV for conducting R&D activities in order to reach prototype stage. Often, organization that are involved in infrastructure projects build up a JV ahead of contract bidding, so that they can market the collective strength of venture. In an event, the JV partners fail to win the contract; they may still chase other projects together. Some rising market economies need that foreign companies build JVs as a method of giving employment, training and transferring technology. Moreover, plan on achieving the same owing diligence for a merger or acquisition. So, before signing a formal contract, both the partners must prepare the ground for that contract by drafting an agreement letter that might be formalized later into a legal contract.
About ALCOR Mergers and Acquisitions
Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These Services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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Venture Capital Deals Break More Records in Q3 2017
Quarter builds on $48bn in deals announced in Q2 to register an all-time high of $49bn
The venture capital-backed deal industry has registered a second consecutive record-breaking quarter, as 2,362 deals were announced worth a combined $49bn. Expecting these figures to rise by around 5% as more information become available. This follows Q2, which saw 2,512 deals announced worth $48bn, to put total deal activity in the first three quarters of 2017 at $128bn, on course to become an all-time annual high. However, these record values are being recorded by a declining number of transactions, with Q3 representing the sixth consecutive quarterly decline.Q1-Q3 2017 has seen 7,552 venture capital-backed deals announced, compared to 8,792 in the equivalent period of last year.
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Key Venture Capital Deals Facts:
- In Q3 2017, there were 2,362 deals made with an aggregate deal value of $49bn. This is the second consecutive quarter to register record high aggregate deal values.
- North America saw the greatest activity in the quarter, with 939 deals announced for an aggregate deal value of $19bn.
- Israel saw the greatest drop in deal activity from the previous quarter. In Q2 2017, Israel made up 34% of aggregate deal value; in Q3, this figure stands at just 1%.
- Series A financings made up 31% of venture capital deals in Q3 2017, while angel investments accounted for a further 26% of deal flow.
- Later stage venture capital deals have increased in value over the past few years. While average series A-C financings in 2017 YTD are smaller than in 2016, Series D and later funding rounds have hit a new record high of $98mn.
- Deals in software account for the greatest proportion of deals (26%), but deals in internet companies account for the largest share of aggregate deal value (26%).
- The largest venture capital deal announced in Q3 was the $2bn financing of Grab Holdings.Funding came from investors including Didi Chuxing, the firm involved in the largest venture capital-backed deal ever recorded.
- The largest venture capital-backed exit announced in Q3 2017 was the CNY 9.5bn sale of China-based Mango TV to Happigo.
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2017 now seems assured to set new records for venture capital-backed deal activity, as the industry has witnessed its second consecutive record-breaking quarter. Driven by the rising number of late-stage multi-billion dollar financings – eight in Q3 alone – the industry is setting new records with increasing regularity. Increased opportunities in emerging markets and increased appetite from investors are combining to propel the venture capital industry to new heights.
The bulk of deal activity remains focused on the earlier part of the funding cycle, with angel and series A investments accounting for almost half of total deal numbers. However, deal values are increasingly being driven by large late stage financings and debt issuances. In fact, while the average value of financings up to series C have all fallen in 2017, average series D deals are at a record high, while the average venture debt issuance is more than twice as large as it was in 2015.
Source - preqin
About ALCOR Mergers and Acquisitions
Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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Paytm Acquires Nearbuy and Little, to Merge both - Expect A Busy 2018 On The M & A Front
Paytm on Wednesday announced the acquisition of Nearbuy and Little, two deals platforms that focus on local restaurants as well as commercial establishments. In a statement, Paytm said it arranged a merger of the two well-funded start-ups and made a “strategic” investment in the resultant entity for a majority stake. Sequoia Capital India, a large investor in Nearbuy (formerly Groupon India), continues to be a shareholder in the merged entity. Paytm did not say whether Sequoia sold a part of its investment in Nearbuy to Paytm Nearbuy, which was founded as SoSasta, was acquired by NASDAQ-listed Groupon Inc. in 2011.The company was later renamed as Groupon India, in 2013.In 2015, Sequoia Capital India and the current chief executive officer (CEO) Ankur Warikoo bought a majority stake from the US-based parent of the firm and named it Nearbuy.Little app (Little Internet Pvt. Ltd), on the other hand, was launched in 2015 with initial backing from Paytm, which wanted to test the waters in the hyperlocal deals business.The app started with a $50 million investment from Paytm, SAIF Partners and Tiger Global Management (SAIF is also a large minority shareholder in Paytm).
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After a somewhat choppy 2017, many experts are calling for a busy 2018 in the M&A space. The Predictions and Reports suggests that the pace of M&A activity will increase in 2018, based in large part on “a combination of gradual acceleration in global economic growth, low inflation in advanced and emerging economies, buoyant asset markets and low-interest rates that continue to bolster the M&A markets.” While there are concerns that could impact the potential increase in deal flow (such as a rise in economic protectionism or a global equity sell-off) the prevailing view is that the positive conditions for M&A activity will continue to rule the day and drive increasing deal making.
One of M and A Experts says “The State of the Deal-M&A Trends 2018” report takes a similar view. The report, based on a survey of business executives, notes that a significant majority of respondents expect M&A deal flow to increase over the next 12 months, while deal size is expected to increase as well. The report cites acquiring technology, expanding customer base in existing markets and expanding/diversifying products and services as the leading drivers for M&A deals. Among other positive factors, the report notes that cash reserves are up significantly at potential acquirers, and that the primary intended use of that cash is for acquisitions.
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Family-owned businesses should see an uptick in M&A interest as we move into 2018.
Buyers are always on the watch for well-run businesses with quality earnings and customer bases. Family-owned businesses that are looking to grow should see an opportunity to acquire other businesses. Those businesses that want to take advantage of a favourable market should start to take steps now to prepare, by working with management and advisors to get the business “in shape” for a transaction. Several upcoming posts on this blog will discuss specific items that come up in almost every deal and steps business owners can take to prepare for a sale, such as dealing with financial statements, contracts management and HR/ERISA issues.
About ALCOR Mergers and Acquisitions
Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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Fundraising for Women-Run Venture Capital Funds Accelerates
Despite remaining underrepresented in the industry, women-owned funds are securing more capital and making more deals in 2017
Women make up an average of 21% of staff at venture capital funds. This proportion falls to 11% of senior staff, and just 6% of board members at venture capital firms. However, women-owned* venture capital vehicles have seen fundraising reach new heights in 2017 YTD, as 13 funds have secured $2.4bn as of September. This is up from the $1.8bn raised by 25 women-owned funds in all of 2016, and follows a consistent trend of growing activity over the past five years. Looking ahead, there are 58 further women-owned funds in market, seeking a combined $6bn from
investors – 4% of total capital sought by the industry. Women-owned funds are also increasingly active deal makers, being involved with 510 financings in 2017 so far, worth a total of $6.4bn. The largest proportions of these were in software and internet companies, mirroring overall industry trends.
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Key Women in Venture Capital Facts:
- Women make up an average of 21% of venture capital employees. At a senior level, women constitute 11% of staff, and occupy 6% of venture capital board seats.
- Women-owned venture capital funds have seen a sustained upswing in annual fundraising. Twelve women-owned funds raised $0.8bn in 2013. As of October 2017, though, 13 women-owned vehicles have secured $2.4bn.
- There are 58 women-owned venture capital funds in market, seeking a combined $6bn. The largest of these is Baidu Capital, which is targeting $2.95bn.
- In the first three quarters of 2017, women-owned funds have been involved with 510 deals, worth a total of $6.4bn. Of these, 25% were for software companies, and 22% were for internet firms.
- On a partner level, female partners have led 307 deals in 2017 so far, worth a combined $5.1bn. This is a record for both the number and value of women-led deals, and accounts for 9% of total deal activity this year.
- Funds of funds are the most active investors in women-owned funds, providing 29% of funding since 2000. Public pension funds (22%) and foundations (13%) are also significant backers.
- Almost three-quarters (74%) of funding for women-owned venture capital funds comes from North America-based investors. European and Asian investors account for 20% and 5% of commitments, respectively
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The venture capital industry is undergoing a storm of controversy over the representation and treatment of women both as founders and as venture capitalists. Initiatives to promote gender equality in the industry have included high profile decency pledges and women-focused mentorship and empowerment programs. Women only represent one in five staff at venture capital firms, and one in ten senior staff, highlighting the uncommon nature of these programs, and the structural and long-term challenges they face. However, we may feel encouraged by the fact that women-owned venture capital funds have steadily become more common and more active, raising more money in the first three quarters of 2017 than ever before as well as being involved in over 500 financing rounds. At the same time, female partners at firms have already marked a record year for both the number of deals they have led, and the total size of those deals. While these developments are welcome,
it should not dilute the fact that women undoubtedly still face numerous challenges in the venture capital industry.”
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Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisory, Joint Venture Advisory, Financial Advisory, Private Equity, Debt Financing and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.
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