Cortellis M&A Landscape: Notable mergers & acquisitions of Q1 2017

The mergers and acquisitions (M&A) activity in the Life Sciences sector in the first quarter of 2017 continued to progress like previous periods. In the first months of the year, 126 active M&A deals were reported by Clarivate Cortellis Deals Intelligence with a total disclosed value of $76 billion. The volume was approximately 17% more than the fourth quarter of 2016 (107 active M&A deals), which had reported a total disclosed value of $19.9 billion (including Lonza's planned $5.5 billion acquisition of Capsugel).

Deal activity in 1st Quarter from 2009 to 2017

Observing the same quarter over the last eight years, the first quarter of 2017 achieved similar values as 2015, which included AbbVie's $21 billion targeting of Pharmacyclics and Pfizer's $17 billion bid for Hospira (figure 1). 2017 was assisted by Johnson & Johnson's $30 billion approach for Actelion and Reckitt Benckiser's $17.9 billion proposition for Mead Johnson Nutrition. Although total deal value increased by 100% since Q1 2016, the number of deals peaked at 178 but reduced to 126 this quarter.

 

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Figure 1: Deal activity in 1st quarter from 2009-2017 (Source: Clarivate Cortellis Deals Intelligence)

 

Johnson & Johnson's $30 billion proposal for Actelion

Johnson & Johnson (J&J) initiated a $30 billion proposal at $280 per share for Actelion (92% of shares acquired as of April 2017), being attracted to phase III sphingosine-1-phosphate receptor-1 agonist ponesimod for multiple sclerosis, phase III Clostridium difficile antibiotic cadazolid, marketed products and the pulmonary artery hypertension (PAH) franchise. Actelion's drug discovery operations and early-stage clinical development assets will be spun out into a newly created Swiss company, Idorsia prior to the completion of which J&J would own 16% with rights to an additional 16%. J&J also has an option to the spun-out phase II endothelin-A and -B receptor antagonist and anti-hypertensive ACT-132577 (Zependo). 

Reckitt Benckiser approaches Mead Johnson Nutrition for $17.9 billion

Reckitt Benckiser approached Mead Johnson Nutrition (MJN) for $17.9 billion ($90 per share and MJN's net debt) to integrate the nutrition developer into a new division to include its own brands Enfamil and Nutramigen. Both parties have the right to terminate if the transaction is not complete by September 10, 2017 and receive $480 million. The growing infant nutrition market coupled with Mead's $3.7 billion revenue presents an attractive proposition for Reckitt.

Mars launches $9.1 billion for pet health services provider VCA

Chocolate and pet food maker Mars launched a pursuit for pet health care provider VCA for $93 per share, valued at approximately $9.1 million (including $1.4 billion in outstanding debt). VCA operates in almost 800 animal hospitals and 60 diagnostic laboratories within the US and Canada and would situate as a separate unit in the Mars Petcare division along with Mars' other veterinary services. The transaction was due to close in Q3.

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