In the second quarter of the year, 112 active mergers and acquisitions (M&A) were reported in the life sciences sector by Cortellis Deals Intelligence, from Clarivate Analytics, with a total disclosed deal value of $55.6 billion. The second quarter pace mirrored the level of M&A activity during the same time period from 2013 or 2014, but it stopped the positive progression reached over the last two years. The volume was also approximately 25% less than the first quarter of 2017 (131 active M&A deals) with a total disclosed value of $73.8 billion (including the recent $30.2 billion purchase of Actelion by Johnson & Johnson).
Deal activity in 2nd Quarter from 2009 to 2017
Deal activity in the second quarter of 2017 reached a parallel value and size as 2011, which incorporated the $19.7 billion offer of Synthes by Johnson & Johnson, and 2013, which included the acquisition of Life Technologies by Thermo Fisher for $15.3 billion (Figure 1). Between April and June, the Becton, Dickinson (BD) $24.2 billion bid for C.R. Bard and the $7.2 billion offer of Thermo Fisher for its competitor Patheon reflected the strategic transactions occurring during the second part of the year, with the first six months ending with a total disclosed value of up to $129.4 billion and more than 240 agreements.
Figure 1: Deal activity in the 2nd quarter from 2009 – 2017 (Source: Cortellis, Clarivate Analytics)
BD launches $24.2 billion offer for medical device maker C.R. Bard
BD, the technology company, announced the main quarterly disclosed transaction with its $24.2 billion bid to acquire medical device firm Bard, whose shareholders would receive $317 per share ($222.93 in cash and $94.07 stock per share). Following the completion of the transaction, which is expected in the fall of 2017, BD will incorporate into its assets Bard’s vascular, urological, oncology and surgical products which generated 2016 annual sales of $3.7 billion. With this strategic movement, BD will reinforce its $12.5 billion acquisition of CareFusion in 2015 which included several products for medication management, infection and respiratory care. In June, BD and Bard were required to provide additional information about the transaction to the U.S. Federal Trade Commission (FTC), but both parties remained confident that they would reach completion of the agreement as had been planned.
Thermo Fisher’s $7.2 billion tender for CMDO Patheon
Patheon’s shareholders received Thermo Fisher’s proposal of $35 per fully diluted share of the Dutch firm, valued at approximately $7.2 billion, including the assumption of $2 billion of net debt. Patheon is a contract development and manufacturing (CDMO) company offering drug product, drug substance and pharmaceutical development services. It will form part of and should complement Thermo Fisher’s laboratory products and services segment, which had already obtained revenues of $7.03 billion in 2016. Following completion by the end of the year, Thermo Fisher will own high value and varied business assets obtained over the last four years (Figure 2).
Figure 2: Thermo Fisher’s acquisitions from 2014 to 2017
Editor’s Note: All data contributing to this analysis was sourced from Cortellis Deals Intelligence from Clarivate Analytics. Find and compare life sciences deals to enable effective negotiations: clarivate.com/cortellis-deals-intelligence.
This article was adapted from the complete Q2 analysis from Cortellis which also includes coverage of these important M&A deals: Avantor and VWR; inVentiv Health targeted by INC Research; Fresenius buys Akorn; Philips expands with Spectranetics; PerkinElmer acquires EUROIMMUN; Valeant sells iNova; Astellas purchases Ogeda; Bioverativ and True North; plus as quick preview of Q3.