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Healthcare M&A hits historic high

March 31, 2015
by Julie Miller, Editor in Chief
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All things considered, the $6.6 million purchase of Sunrise House by American Addiction Centers yesterday isn’t that big of deal. But if you put in the context of healthcare’s busiest acquisition day ever, you begin to see it’s a seller’s market.

According to Bloomberg, March 30 marked several major acquisitions:

  • UnitedHealthcare, the largest U.S. health insurer and owner of Optum, purchased Catamaran, a pharmacy benefits management company that has several recent acquisitions in its history book, for $13.2 billion.
  • Teva Pharmaceuticals purchased Auspex Pharmaceuticals for $3.1 billion.
  • Horizon Pharma agreed to buy drug maker Hyperion Therapeutics for $866 million.
  • Fujifilm Holdings—which has parlayed its past capabilities in manufacturing photographic film into the science of regenerative medicine—agreed to buy Cellular Dynamics International, which develops human cells such as stem cells for banking and drug research, for $239 million.

According to the report,  M&A activity in healthcare has already reached $75 billion this year and could lead to 2015 being a historic high. 2014 deals reached a record volume of $220 billion.

“Yesterday’s historic day comes on the heels of a busy week last week, with Humana announcing that it was selling its urgent care division, Concentra for $1.06 billion,” says Kevin Taggart, managing partner at Mertz Taggart. “Healthcare continues to be one of the more attractive investments for private equity and strategic buyers alike, and it highlights the fact that healthcare is still a sellers’ market. We see it continuing for the next several years provided the markets continue to provide access to capital, as providers continue to consolidate.”

Taggart says there’s tremendous interest from all types of buyers for addiction treatment centers with enterprise values between $1 million and $50 million.

“In fact, there are many buyers trying to enter the market that are struggling to find an asset to buy,” he says.