T h e W a l d e n G r o u p


Q2 2015 Strategic Healthcare M&A Report

At a glance …


 Key Developments in Q2

 Valuation and Performance Metrics of Leading Healthcare Companies

 Notable Deals in Q2 2015 -- Summaries

 Top Deals of Q2 2015 > $100m in Transaction Value

 Analysis of 65 M&A Transactions announced or closed in Q2 2015




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The Strategic Healthcare M&A Report analyzes important merger, acquisition and strategic transactions taking place in the healthcare industry. A complimentary copy of the
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With 20 years of experience and a lengthy track record, The Walden Group is a strategic healthcare investment banking and consulting firm, specializing in fitted mergers and
acquisitions for medical device, diagnostics, healthcare IT, healthcare services and niche pharmaceutical firms.

© 2015 The Walden Group®, Inc. No part of this report may be reproduced without written permission of The Walden Group, Inc. All rights reserved.



1

1. Key Developments in Q2

Healthcare Insurers Are Merging in light of The Supreme Court's Affirmation of the Affordable Care Act

In June 2015, the Supreme Court of the United States affirmed the Affordable Care Act in King v. Burwell. While the Republicans may
continue to try to change some provisions, the Court clarified much of the uncertainty surrounding the fate of the ACA. The law provides
for a major expansion in the number individuals entitled to insurance coverage and higher burdens on insurers to cover pre-existing condi-
tions and other pathologies. New ACA rules also make insurers spend a fixed amount of the premiums they collect on care vs administra-
tive and marketing expense, essentially capping their profits even if they are charging much higher prices. The added cost burdens are
causing the major insurers to consolidate to gain economies of scale and greater negotiating strength vis a vis large hospital chains. Aetna
Inc. and Humana, Inc. thus announced a $34.1b merger to create the No. 2 health-insurance company in the U.S., pairing Humana’s
strong Medicare franchise with Aetna’s business of selling medical coverage to employers. Aetna and Humana are now the third- and
fourth-largest insurers by revenue, and the combined company would have about a million more Medicare Advantage members than its
next-closest competitor, UnitedHealth Group, Inc.

In late June 2015, Centene Corp., a Medicaid-focused health insurer, agreed to buy Health Net Inc. for $6.3b to boost its presence in Cali-
fornia and other western states. Then, in July 2015, An-
them Inc., which operates for-profit Blue Cross plans in
14 states, announced that it is buying Cigna Corp., an-
other large healthcare insurer, for $54b in a transaction
that will shrink the five largest U.S. health insurers to
just three. UnitedHealth, the largest insurer, has so far
not participated in the merger activity.

While the insurers claim that the efficiencies resulting
from the combinations will benefit consumers, the re-
duced competition is not likely to lower premiums and
medical costs, which continue to climb. See accompa-
nying chart. The insurer M&A deals are being reviewed
by the antitrust authorities for anticompetitive effects,
but some consolidation seems inevitable.






2



The Laboratory Diagnostics Segment Settles Down and Regroups Using Data Ana-
lytics and Tools for Providers and Consumers

After several years of government reimbursement pressure, headwinds are
beginning to abate. Given the aging population, the significant positive im-
pact in vitro diagnostics have on the medical care and controlling costs, the
diagnostics market is expect to grow. This is especially the case in regard to
molecular diagnostics and genetic testing, which enable more personalized
and targeted therapeutic approaches. See accompanying chart.

Although all moving parts to diagnostic reimbursement and funding have not
aligned yet, Quest Diagnostics reports growth in its Medicaid and managed
Medicaid volumes in different markets around the country, as well as a de-
crease in uninsured patient volumes. These trends are consistent with more
uninsured patients beginning to access health care.

In this changing climate, Quest Diagnostics addresses various constituencies
to enhance connectivity, improve healthcare outcomes and reduce cost. For
example:

 For physicians, Quest's Interactive Insights analytics program offers provider trending data, interactive features such as customizable
reports and content, videos, and articles related to specific conditions and diseases.
 For hospitals, more than 100 customers are now using its IntelliTest Analytics solution, a tool providing hospitals, integrated delivery
networks, and physician practices, with timely access to utilization data to assist with laboratory test optimization decisions and cost
controls.
 For health plans, Quest has pilots for its Quest Analytics self-service informatics tool that enables health plan customers to query
Quest's database to help manage populations of patients, and encourage the appropriate use of screening and monitoring tests to
drive better health and efficiencies.
 For consumers, Quest offers wellness health-risk assessments, which will be expanded to help athletes and their coaches and trainers
gain insights into the training recovery regiments, peak performance conditions and optimal dietary consumption. More than 1.8 mil-
lion patients have now downloaded the MyQuest application, to access historical lab results. As the responsibility for managing and
paying for healthcare shifts rapidly to consumers, Quest is positioning itself to be the consumer-friendly diagnostic testing provider.

$0.0
$10,000.0
$20,000.0
$30,000.0
$40,000.0
$50,000.0
$60,000.0
$70,000.0
2014 2015 2016 2017 2018 2019 2020 2021
In Vitro Diagnostics Global Market
Clinical Chemistry
Genetic Testing
Haematology
Histology And Cytology
Immuno Chemistry
Infectious Diagnostics
Microbiology Culture
(Millions)
Source: GlobalData


3


Drugs for Rare Diseases, Cancer and other Conditions Continue to Enjoy High Pricing, but For How Long?

The $3.2b purchase of Synageva BioPharma Corp. by Alexion Pharmaceuticals again put the spotlight on the high cost of specialty drugs.
Synageva's lead candidate, Kanuma, is designed to treat lysosomal acid lipase deficiency, a genetic disease in which people do not pro-
duce enough of a certain enzyme. Infants with the disease often die
within months. It can also cause liver damage and other problems in
children and adults. So-called orphan drugs like Kanuma are now
among the most attractive in the industry because companies can
charge hundreds of thousands of dollars a year to treat rare dis-
eases, making a blockbuster drug possible with only a few thousand
patients. Developers of rare-disease drugs can also qualify for spe-
cial tax breaks and protection from competition under federal law
and can often win regulatory approval with smaller clinical trials. As
reflected in the accompanying chart (source: FDA Law Blog,) the
FDA has dramatically increased the number of orphan drug approv-
als in the past year or so. To date, CMS and insurers have not paid
much attention to the prices of these drugs because so few patients
use them. But, with more of these drugs coming to market due to
the attractive economics, payors are likely to push back on the exorbitant pricing, closing the window of opportunity a bit in what some
consider a "bubble". Yet, on August 4, 2015, Shire Pharmaceuticals announced an unsolicited $30b bid for Baxalta Incorporated, a $6b
biopharmaceutical company, within weeks after it was spun-off from Baxter Laboratories.

Pharmacy benefit managers are also pushing back on high prices of more conventional drugs. Recently, Express Scripts expressed discon-
tent on the proposed price of the cholesterol-lowering PCSK9 inhibitor Praluent (alirocumab). Co-developers Sanofi and Regeneron Phar-
maceuticals announced that the wholesale acquisition cost of the once-every-two-week injection will be $40 per day or $14,600 per year.
This is several orders of magnitude above the cost of statins, which average $2-3 per day. And, many consider the exorbitant prices of
many cancer drugs to be unsustainable.

According to Milliman, the medial actuarial firm, prescription costs spiked in 2015, growing by 13.6% from 2014 to 2015. The spike re-
sulted from the introduction of new specialty drugs as well as price increases in both brand and generic drugs, increases in use of com-
pound medicines, and other causes. This trend is not sustainable.





4

Minimally Invasive Surgery (MIS) Procedures Continue to Become Standards of Care

Until a few years ago, the only treatment for Aortic Valve Stenosis (narrowing of the aortic valve) was open-heart surgery -- cutting open a
patient's chest to expose the heart; placing the patient on a heart-lung bypass machine while the heart is stopped; cutting into the heart
to remove the bad valve and then inserting a new one, either a mechanical device or one made partly with animal tissue. But roughly 1/3
of all patients with severe aortic stenosis are considered too high risk for open-heart surgery. Without treatment, their condition gets
worse. About 50% die within one to two years without corrective therapies.

However, in 2005 Edwards Lifesciences conducted the first minimally invasive placement of heart valve in a procedure known as
Transcatheter Aortic Valve Replacement (TAVR). Given the improved safety, quicker procedural time, expedited recovery period, reduced
cost, and increased life expectancy, TAVR has been transitioning into a standard of care for patients with severe symptomatic aortic steno-
sis who have an unacceptably high estimated surgical risk, or in whom TAVR is preferred due to technical issues with surgery. In the past
several years, TAVR has been the rage in M&A and R&D. Abbott Laboratories has become the latest company to enter the TAVR market,
buying one company and gaining the option to acquire another. Abbott is spending up to $250m on Tendyne Holdings Inc. and has also
invested in Cephea Valve Technologies. The deals follow a few weeks after Edwards Lifesciences agreed to purchase another transcathe-
ter mitral valve implantation specialist, CardiAQ Valve Technologies. The remaining independent player is Neovasc Inc., which might be
the next M&A candidate.

The advantages of MIS is also reflected in Medtronic's purchase of Aptus
Endosystems Inc., a developer of a minimally invasive alternative to open
surgery for the repair of AAA conditions (abnormal enlargement of the ab-
dominal aorta).


Reflecting a Market Need for Cardiac Assist Devices, Heart Pumps are Surging

On August 4, 2015, Abiomed, Inc. (NASDAQ:ABMD), a leading provider of
minimally-invasive heart support technologies, reported Q1 fiscal 2016
revenue of $73.4m, a YOY increase of 50%. Fiscal Q1 worldwide Impella®
heart pump revenue totaled $68.8m, an increase of 53% compared to the
same period of the prior fiscal year. An additional 15 hospitals made initial
purchases of Impella during the quarter, bringing the installed customer
base to 973 sites. Gross margin for fiscal first quarter 2016 grew to 85%
compared to 80% in the Q1 fiscal 2015. Abiomed benefited from an ex-
panded indication from the FDA in March 2015, which enabled use of the
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
2013 2014 2015 2016 2017 2018 2019 2020
Cardiac Assist Devices - Global Market
Intra-Aortic Balloon Pumps
Total Artificial Heart
Ventricular Assist Devices
(Millions)
Source: GlobalData


5

Impella 2.5 during elective and urgent high-risk percutaneous coronary intervention (PCI) procedures. In 2008, the device had been per-
mitted for use in a narrower indication, partial circulatory support for up to 6 hours.

The market for cardiac assist devices has been growing in the past few years, and market increases are expected for years to come. See
the following chart.

Reflecting these market dynamics, on July 21, 2015 St. Jude Medical Inc. announced it was buying Thoratec Corp., a maker of ventricular
assist devices, for $3.4b, on sales of $477.5m (7.1x) and EBITDA of $77.5m (43.9x). The deal strengthens St. Jude Medical’s business in
treating heart failures by adding ventricular assist devices, a market where Thoratec holds a 60% position. Thoratec is the St. Jude's largest
deal ever, surpassing its $1.25b purchase of Advanced Neuromodulation Systems Inc. in 2005.

M&A Continues to play a Vital Role

Like other large companies, Cardinal Health relies on M&A to augment growth. During Q2 Cardinal Health paid $1.12b to buy Harvard
Drug Group from Court Square Capital Partners. The deal enhances Cardinal's distribution of generics and OTC drugs to retail, institu-
tional and alternate care customers. Over the past five years, Cardinal has made several key acquisitions:

 Kinray (drug wholesaler to pharmacies --2010)
 Cardinal Health China (drug distribution -- 2010)
 Healthcare Solutions Holding (online oncology information communications to patients and physicians -- 2010)
 AssuraMed (provider of medical supplies to patients in the home -- 2013)
 AccessClosure (vascular closure devices - 2014)

Innovative Therapies (negative pressure wound therapy -- 2014)
 Metro Medical (specialty drug distribution to independent pharmacies -- 2015)
 Cordis (stents and catheters -- planned for 2015).

In addition to M&A, Cardinal has executed several key strategic alliances. It has joined forces with Henry Schein to more efficiently serve
small physician practices, many of whom are now affiliated with IDNs. The alliance enables Cardinal to move its branded products through
more channels.

Medtronic too relies on
M&A to supplement its or-
ganic growth. Deals an-
nounced or completed in H1
2015 include:
2015 Medtronic M&A Deals Through June 30
Deal Value
(millions, NA= Not
Announced)
Advanced Uro-Solutions, L.L.C. (neurostimulation products)
NA
Diabeter (Dutch diabetes clinic and research center)
NA
Sophono, Inc. (magnetic hearing implants)
NA
Aptus Endosystems Inc. (devices for endovascular and thoracic aneurysm repair)
$110.0
CardioInsight Technologies Inc. (3-D maps of electrical activity in the heart)
$93.0
Arsenal Medical (startup developing a polymer-based foam to control intra-abdominal bleeding)
NA
RF Surgical Systems, Inc. (detection systems for surgical sponges placed in patients during surgery)
$235.0


6

China Continues to be a Volatile Government-Centric Market

In the two years after China opened its stock market, shares soared 1200% and twice fell by half. The market vacillates between big gov-
ernment-driven rallies and equally dramatic selloffs that leave investors reeling. “China’s stock markets have developed quickly and their
accomplishments are great, but they are very irregular,” Zhu Rongji, China’s premier at the time, said in 2000. “If they are to receive the
people’s trust, the investors’ trust, then they have a lot of work to do.” Stocks are down by 29% from their peak in June, and investors
have continued to sell shares despite the strongest efforts ever by the government to prop up prices. The current bear market—defined
as a fall of 20% or more from a peak—is the 27th that investors have suffered in the past 25 years.

China's stock market dynamics reflect its healthcare commercial market. There is little certainty what is organically generated and what is
government-supported. The unpredictability of government intervention, coupled with red tape and rising prices, has made China a more
challenging market to penetrate. This is why Boston Scientific chose to take an equity stake in Suzhou Frankenman Medical Equipment
Co. in Q2 2015, rather than go it alone. The deal Enables Boston Scientific to build an endoscopy business in China, overcoming the signifi-
cant barrier to entry for foreign companies due to the complex regulatory framework required and the "Buy China" policies favoring do-
mestic manufacturers.











7

2. Performance of Selected Healthcare Companies (as of August 4, 2015)


Company
Market Cap
(millions)
EV
(millions) EV/ EBITDA EV/ SALES
52 WK
Perf
52 WK
Perf VS
MKT
Revenue
(millions)
Revenue
Growth
Gross
Margin
ROE
ROE VS
Industry
Abbott
$75,000
$74,000
16.7x
3.6x
21%
10%
$20,000
-7%
60%
19%
221%
Aetna, Inc.
$40,000
-
-
-
45%
32%
$60,000
9%
-
14%
108%
Becton, Dickinson and Company
$32,000
$44,000
20.0x
5.2x
31%
20%
$8,460
-1%
58%
15%
-
Boston Scientific
$23,000
$27,000
25.7x
3.7x
37%
25%
$7,340
-2%
74%
-
-
Cardinal Health
$28,000
$29,000
11.6x
0.3x
15%
5%
$98,000
18%
6%
18%
-
Cerner
$24,000
$24,000
22.4x
6.7x
32%
21%
$3,610
27%
88%
14%
65%
Quest Diagnostics
$11,000
$14,000
10.9x
1.9x
21%
10%
$7,550
1%
41%
13%
140%
Danaher Corporation
$62,000
$62,000
14.0x
3.1x
25%
14%
$20,000
3%
58%
11%
-
Express Scripts
$60,000
$72,000
12.1x
0.7x
29%
17%
$102,000
1%
10%
14%
78%
Edwards Lifesciences
$16,000
$15,000
24.2x
6.3x
67%
52%
$2,430
7%
77%
19%
454%
Fresenius Medical Care
$25,000
$34,000
11.3x
2.1x
20%
10%
$16,000
11%
36%
13%
104%
GlaxoSmithKline
$94,000
$106,000
14.9x
3.0x
-9%
-17%
$35,000
-11%
72%
138%
531%
Hologic
$12,000
$15,000
15.5x
5.8x
56%
43%
$260
5%
68%
5%
-
Henry Schein
$12,000
$13,000
14.8x
1.3x
25%
14%
$10,000
1%
30%
19%
133%
Heartware International
$1,550
$1,500
587.0x
5.3x
8%
-2%
$280
5%
74%
-
-
Humana
$27,000
-
-
-
55%
41%
$51,000
18%
-
12%
90%
Integra LifeSciences
$2,110
$2,650
19.1x
2.8x
50%
37%
$950
9%
68%
6%
42%
Intuitive Surgical
$19,000
$18,000
23.7x
7.9x
19%
9%
$2,270
14%
70%
13%
-
Johnson & Johnson
$277,000
$261,000
10.7x
3.6x
0%
-9%
$72,000
-9%
75%
23%
90%
McKesson
$52,000
$56,000
13.6x
0.3x
11%
2%
$183,000
8%
7%
19%
106%
Medtronic
$110,000
$127,000
21.0x
6.3x
27%
16%
$20,000
60%
72%
5%
69%
Merck & Co.
$167,000
$181,000
14.3x
4.5x
3%
-6%
$40,000
-11%
76%
23%
90%
Novartis
$252,000
$269,000
30.2x
5.2x
19%
8%
$52,000
-8%
68%
25%
-
Pfizer
$223,000
$231,000
12.5x
4.8x
24%
13%
$48,000
-7%
84%
14%
53%
Pall
$14,000
$13,000
19.4x
4.5x
63%
49%
$2,850
0%
55%
24%
-
Qiagen
$6,530
$7,190
31.6x
5.4x
16%
6%
$1,330
-6%
82%
5%
56%
St. Jude Medical
$21,000
$23,000
14.4x
4.2x
13%
3%
$5,570
-3%
74%
25%
291%
Stryker
$38,000
$35,000
18.2x
3.6x
27%
16%
$10,000
3%
68%
11%
92%
Thermo Fisher
$55,000
$69,000
17.9x
4.1x
15%
5%
$17,000
-1%
56%
9%
94%
UnitedHealth
$115,000
-
-
-
48%
35%
$138,000
11%
-
19%
140%


8

3. Notable Deals of Q2 2015

Biopharmaceuticals

 Seeking to take advantage of huge per patient prices and market protections associated with orphan drugs for rare disease states, Alexion
Pharmaceuticals is buying Synageva BioPharma for $8.4b. This deal reflects rush of such deals. See "Key Developments in Q2" above.

 Allergan’s $2.1b impending purchase of Kythera Biopharmaceuticals highlights the popularity and lucrative nature of aesthetic treat-
ments. Ketera developed a non-surgical treatment for submental fullness and has pipeline drug for the prevention of male pattern bald-
ness to complement Allergan’s aesthetic line (i.e., Botox).

 Circassia Pharmaceutical’s deepens its allergy and asthma diagnostics and product pipeline with its simultaneous purchase of Aerocrine
for $216.2m and Prosonix for $110.3m.

 Opko Health gained access to an R&D niche portfolio of specialty, high-entry and high potency drugs with its $135m purchase of EirGen
Pharma.

 Endo International continues its focus on specialty pharmaceuticals with a $130m acquisition of Aspen Pharmacare’s pain management
and cardiovascular drug research pipeline and market-ready products. This follows their recent purchases of Auxilium Pharmaceutical for
$2.6b (1Q15), Boca Pharmacal (2013) and DAVA Pharmaceuticals (2014).

Data Management / IT

 Mendax’s $185m purchase of Virtual Radiologic (vRAD) reflects the promise of teleradiology and the broader telemedicine market.

Diagnostics

 Opko Health, having only a small presence in the clinical laboratory-testing marketplace, purchased Bio-Reference Labs, for $1.47b
through a stock merger, adding to its genetics and genomic data for personalized drug development and increasing its diagnostics sales.

 Eurofins Scientific strengthened its growing presence in the specialty diagnostic testing sector with the purchases of Biomnis for $249.6m
and Diaterix Laboratories for $50m.



9

 Danaher’s is expanding into the $20b filtration market through its largest acquisition to date -- $13.8b for Pall. The market is, expected to
grow as biotechnology companies launch and develop more drugs made from living cells (biologics) that require advanced purification
systems for production.

Distribution

 Cardinal Health’s $1.12b purchase of Harvard Drug increases its distribution of generics and OTC drugs and related products to retail,
institutional and alternate care customers, and broadens its telesales capabilities.

Medical Devices

 Hill-Rom’s purchase of Welch Allyn for $2.05b provides Hill-Rom with an established, well-known portfolio of point of care devices and
diagnostics that address a range of call points and maximize inter-operability of many of Hill-Rom's devices.

 Reflecting a wave of acquisitions of Israeli companies by China ones, XIO Group entered the medical laser market through its $510m pur-
chase of Lumenis, which has technologies for surgical, ophthalmic and aesthetic applications.

 Through its $175m acquisition of Spinal Modulation, St. Jude Medical adds a new approach to chronic pain management which affects
nearly 1.5 billion people globally -- more than heart disease, cancer and diabetes combined. The new approach involves neuromodula-
tion devices to conduct "Dorsal Root Ganglion" stimulation therapy, which has been shown to be effective in treating conditions currently
underserved by traditional spinal cord stimulation therapies.

 Shenzhen Das Intellitech added a medical purification system construction and digital operating room services to its "smart" medical
treatment offering through its purchase of Juixin Medical for $145.5m.

 Medtronic effected several key transactions in the quarter: RF Surgical Systems, Aptus Endosystems, CardioInsight, and Arsenal Medi-
cal. See "Key Developments in Q2" above.

Medical Services

 Part of the spate of medical insurer consolidations, the proposed purchase of Humana by AETNA, for $34.1b, will create the No. 2 health-
insurance company in the U.S., pairing Humana’s strong Medicare franchise with Aetna’s business of selling medical coverage to employ-
ers. See "Key Developments in Q2" above.




10

4. Top Deals of Q2 2015 > $100m in Transaction Value (announced or closed) Continued

Sector
Trans-
Value
Acquiror
Target
Target Sales
($millions)
Target EBITDA
($millions)
Sales
Mulitiple
EBITDA
Multiple
Biopharmaceuticals
$13,800.0 Danaher Corp
Pall Corp.
$2,900.0
$663.0
4.8x
20.8x

$8,400.0 Alexion Pharmaceuti-
cals Inc.,
Synageva BioPharma Corp.
-
-
-
-

$2,100.0 Allergan plc
Kythera Biopharmaceuticals,
Inc.
-
-
-
-

$216.2 Circassia Pharmaceu-
ticals Plc
Aerocrine AB
$20.1
-$19.5
10.8x
-

$135.0 Opko Health, Inc.
EirGen Pharma, Ltd.
-
-
-
-

$134.0 Endo International plc Aspen Pharmacare Holdings
Ltd.
$28.0
-
4.8x
-

$110.3 Circassia Pharmaceu-
ticals Plc

Prosonix Ltd.

-
-
-
Data Management/
Healthcare IT
$500.0 Mednax, Inc
Virtual Radiologic Corpora-
tion (vRAD)

$185.0
-
2.7x
-
Dental
218.3 Straumann Holding
AG

NEODENT
$82.8
-
2.6x
-
Diagnostics
$1,470.0 Opko Health, Inc.
Bio-Reference Laboratories,
Inc. (BRLI)
$882.5
$116.0
1.7x
12.7x

$249.6 Eurofins Scientific SE
Biomnis Group
$264.0
-
0.9x
-

200 Allscripts Healthcare
Solution. Inc.
a 10% equity position in
NantHealth, LLC

-

-
Distribution

$1,120.0 Cardinal Health, Inc.
Harvard Drug Group
$450.0
-
2.5x
-
Medical Devices
13500 Zimmer Holdings, Inc.
Biomet, Inc.
3200
1,800.00
-
-

$2,050.0 Hill-Rom, Inc.
Welch Allyn, Inc.
$700.0
-
2.9x
-

$1,150.0 Panasonic Healthcare
Co., Ltd.
The Diabetes Care Unit of
Bayer AG
$1,028.0
$0.0
1.1x
-


11

Sector
Trans-
Value
Acquiror
Target
Target Sales
($millions)
Target EBITDA
($millions)
Sales
Mulitiple
EBITDA
Multiple

$715.0
Madison Dearborn
Partners (MDP)
The Medical Device Unit of
Patterson Companies
$464.2
$67.2
1.5x
10.6x

$510.0 XIO Group
Lumenis Ltd.
$292.4
$29.4
1.7x
17.3x

$175.0 St. Jude Medical Inc.
Spinal Modulation, Inc.
-
-
-
-

$142.5 Shenzhen Das Intel-
litech Co., Ltd.
Jiuxin Medical Technology
Co., Ltd.
-
-
-
-

$110.0 Medtronic plc
Aptus Endosystems Inc.

-
-
-
-
Medical Services
$34,100.0 Aetna Inc.
Humana Inc.
$50,620.0
$2,700.0
0.7x
12.6x


























12

5. M&A Deal-by-Deal Analysis—Q2 2015 (announced or closed)

The information contained in the table below was derived from publicly available sources. Transaction analysis is inferential and not intended to be relied upon
as pronouncements by the transaction participants or for any other reason. Transactions are pending or closed.



Sector
Acquiror
Target
Analysis
Biopharmaceuticals
Alexion Pharmaceuticals
Inc., a $2.3b biopharma-
ceutical company specializ-
ing in niche disease states
and leading edge therapeu-
tics.
Synageva Bio-
Pharma Corp., a de-
velopment-stage bi-
otech company fo-
cused on rare dis-
ease orphan drugs.
Alexion became one of the most valuable biotech companies on the
strength of a single drug, Soliris, that treats two extremely rare dis-
eases. It charges about $500,000 a year for the drug for each patient,
and seeks to identify every potential patient around the globe. It
hopes to repeat this process with Synageva, whose lead candidate,
Kanuma, is designed to treat lysosomal acid lipase deficiency, a ge-
netic disease in which people do not produce enough of a certain en-
zyme. Infants with the disease often die within months. Synageva es-
timates that at least 3,000 adults and children have the disease in the
major reimbursable markets like North America, Europe, Japan and
South America. Alexion hopes to turn Kanuma into a billion-dollar
drug by following much the same approach it used for Soliris, raising
awareness among doctors so more patients receive the diagnosis.
Due to high prices/per patient, accelerated regulatory pathways and
competitive barriers, drugs to treat rare diseases have become very
attractive to manufacturers. See "Key Developments in Q3" earlier in
this report. Other rare-disease deals include AbbVie’s pending $21 bil-
lion deal for Pharmacyclics, Shire's acquisition of NPS Pharmaceuticals
for $5.2 billion, and Teva's purchase of Auspex Pharmaceuticals for
$3.2 billion. Deal value -- $8.4b, 140% over Synageva's pre-announce-
ment market cap.

Biopharmaceuticals
Allergan plc (NYSE: AGN),
an Ireland-based developer
of generic, branded generic
and OTC pharmaceuticals.
Kythera Biopharma-
ceuticals, Inc., a
clinical-stage bio-
pharmaceutical
company focused
Provides access to the first and only FDA-approved non-surgical treat-
ment injection (KYBELLA) for contouring moderate to severe submen-
tal fullness, known as double chin. The injection has also been sub-
mitted for regulatory approval in Switzerland, Canada and Australia.
Submental fullness is influenced by aging and genetics and is often re-
sistant to diet and exercise. An estimated 67% of consumers have


13

Sector
Acquiror
Target
Analysis
on aesthetic medi-
cine.
been bothered by submental fullness (American Society for Dermato-
logic Surgery). Kythera is executing a training-led launch in the U.S.
supported by a training program designed to educate physicians on
the safe use of the injection and its approved indication. Qualified
physicians in the U.S. will be able to purchase KYBELLA and treat their
patients after they have been trained. Kythera's pipeline also includes
a novel compound for the prevention of male pattern baldness. Ky-
thera's products complement Allergan's aesthetic solutions, namely
Botox. Allergan plc formed following Actavis' $70.5b purchase of Al-
lergan last year. The merger created one of the world's top 10 phar-
maceutical companies projected to generate $23b in sales in 2015.
Deal terms -- $2.1b. Allergan expects the acquisition to be breakeven
in 2016 and accretive thereafter.

Biopharmaceuticals
Circassia Pharmaceuticals
Plc, a UK-based developer
of pharmaceuticals for al-
lergies and autoimmune
conditions.
Prosonix Ltd., a UK-
based developer of
inhaled respiratory
medicines.
Deepens Circassia's position in the allergy and asthma area by adding
a particle engineering platform to create a pipeline of mono and com-
bination inhalation therapy products. Circassia announced on the
same day the acquisition of Sweden-based Aerocrine, a developer of
asthma diagnostics. Prosonix was backed by venture capital firms En-
trepreneurs Fund B.V., Gilde Healthcare Partners B.V., GIMV NV,
Quest for Growth NV, Solon Ventures Limited and Ventech SA. Deal
terms: $110.3m upfront with additional milestones of up to $47.3m.

Biopharmaceuticals
Circassia Pharmaceuticals
Plc, a UK-based developer
of pharmaceuticals for al-
lergies and autoimmune
conditions.
Aerocrine AB, a
Sweden-based de-
veloper of diagnos-
tics and devices for
respiratory diseases.
Strengthens Circassia's allergy and asthma focus, along with its
$110.3m purchase of UK-based Prosonix, a maker of inhaled respira-
tory medicines, announced on the same day. Aerocrine's flagship
products are handheld instruments that measure nitric oxide levels in
exhaled air. Deal terms -- $216.2m on sales of $20.1m (10.8x) and
negative EBITDA.
Biopharmaceuticals
Danaher Corp (NYSE:
DHR), a $20.1b manufac-
turer of medical technolo-
gies for dental, acute care,
Pall Corp., a pro-
ducer of air and wa-
ter-filtration, sepa-
ration, and purifica-
tion products.
Provides expansion into the $20b filtration market, which is expected
to grow as biotechnology companies launch and develop more drugs
made from living cells (biologics) that require advanced purification
systems for production. Within the next few years, biologic drugs will


14

Sector
Acquiror
Target
Analysis
pathology and diagnostic
applications.
nearly double and become 50% of the drug market (Evercore). Dana-
her intends to split Pall into a science and technology company and
an industrial company through a tax-free separation post-closing.
Pall's science and technology operations will combine with Danaher's
life sciences and diagnostics, dental, water quality and product identi-
fication businesses, while the industrial business will focus on the de-
velopment of test and measurement products, retail fuel pumps,
telematics and automation products. The deal will be Danaher’s larg-
est purchase ever, topping its 2011 purchase of biomedical laboratory
instruments maker Beckman Coulter Inc. for nearly $7b. The deal was
reportedly auctioned, with Danaher winning over ThermoFisher. In
2014, Danaher spent $2.2b on Switzerland-based Nobel Biocare Hold-
ing AG to become the world's leader dental implants company as the
demand for cosmetic dentistry grows. Deal terms -- $13.8b on sales
of $2.9b (4.8x) and EBITDA of $663.0m (20.8x).

Biopharmaceuticals
Endo International plc
(Nasdaq: ENDP), a $2.8b
Ireland-based producer of
pharmaceuticals and de-
vices.
A Drug Portfolio of
Aspen Pharmacare
Holdings Ltd., a
$2.9b South Africa-
based seller of
branded and generic
pharmaceuticals.
Adds 60 on-market products and nearly 70 pipeline programs in re-
search phases with applications in pain management and cardiovas-
cular. The deal follows a series of recent acquisitions by Endo Inter-
national including its $2.6b purchase of Auxilium Pharmaceuticals, a
developer of urological and orthopedic treatments, earlier in 2015.
Prior to its purchase of Auxilium, Endo bought generic drug-makers
Boca Pharmacal and DAVA Pharmaceuticals. Endo's generic drug
sales in Q1 2015 rose 68% following the additions of Boca and DAVA.
Deal terms: $130m on sales of $28m (4.8x).

Biopharmaceuticals
Gilead Sciences, Inc.
(Nasdaq: GILD), a $25.0b
developer of biopharma-
ceuticals.
EpiTherapeutics
ApS, a Denmark-
based developer of
cancer drugs.
Adds a portfolio of small molecule-based drug candidates that selec-
tively inhibit epigenetic regulation of gene transcription to treat can-
cer. The Company was bought from investors NOVO Seeds, SEED
Capital, Lundbeckfond Emerge, MS Ventures and Astellas Venture.
Deal terms: $65m.



15

Sector
Acquiror
Target
Analysis
Biopharmaceuticals
Karo Bio Aktiebolag
(STO:KARO), a Sweden-
based biopharma focused
on neuropsychiatry, inflam-
mation, autoimmune dis-
eases, and cancer.

Tanomed AB, a
Sweden-based de-
veloper of products
for the common
cold.
Gives Karo a new product designed to prevent progression of the
common cold by reinforcing the body’s own immune defenses to
fight cold viruses. Several clinical studies show that early treatment
prevents or reduces disease progression. Tanomed's cold drug is ex-
pected to launch commercially within the next two years. Terms not
announced.
Biopharmaceuticals Mission Pharmacal Com-
pany, a provider of pre-
scription medications and
over-the-counter products.
ProSolus Pharma-
ceuticals LP, an
OEM developer of
transdermal drug
delivery products.
Provides Mission with high barrier-to-entry transdermal solutions and
an advanced manufacturing facility with its own research and devel-
opment arms. About five years ago, Mission began a successful part-
nership with ProSolus to produce the LidoFlex Pain Relief Patch,
which delivers a 4% concentration of lidocaine, the highest available
without a prescription, to provide targeted pain relief. Terms not dis-
closed.

Biopharmaceuticals
Opko Health, Inc.
(NYSE:OPK), a $91.1m
maker of pharmaceuticals
and diagnostics.
EirGen Pharma,
Ltd., an Ireland-
based developer of
specialty pharma-
ceuticals.

Gives Opko access to an R&D portfolio of over 20 niche, high barrier-
to-entry drug candidates and a state of the art high containment facil-
ity to produce high potency drugs that are generally unsuitable for
manufacture in normal multi-product facilities due to cross contami-
nation risks. Deal terms -- $135m.
Data Management/
Healthcare IT
Agilent Technologies, Inc
(NYSE:A), a $6.7b provider
of bio-analytical and elec-
tronic measurement solu-
tions.
Cartagenia n.v., a
Belgium-based lead-
ing provider of soft-
ware and services
for clinical genetics
and molecular pa-
thology labs.

With Cartagenia Bench, labs can build an internal knowledge base,
create variant assessment SOPs, automate report drafting, and access
a wide range of community-validated, private and premium content
resources, whether for oncology or inherited disease. Its system's in-
terpretation of clinical genomics data is considered unique. Terms not
announced.
Data Management/
Healthcare IT
Bolder Healthcare Solu-
tions, a developer of
healthcare revenue cycle
The ROI Companies,
a provider of
healthcare RCM ser-
vices.
ROI provides healthcare IT services to hospitals and physician groups
including insurance billing and follow-up, self-pay billing, coding, eligi-
bility, consulting, cash acceleration and collections. Recently, Bolder
also acquired Avectus Healthcare Solutions, a leader in coordination
of third party liability accounts and resolution of complex workers'


16

Sector
Acquiror
Target
Analysis
management (RCM) ser-
vices for hospitals and phy-
sician offices.
compensation accounts for hospitals and trauma centers. With the
addition of Avectus and ROI, BHS now has over 1,500 employees in
the US and India serving over 500 clients across 47 states. BHS oper-
ates from 14 locations including two wholly-owned service centers in
Kolkata and Hyderabad, India. Terms not announced.

Data Management/
Healthcare IT
FujiFilm Medical Systems
USA, Inc, a leading provider
of diagnostic imaging prod-
ucts and medical informat-
ics solutions.
TeraMedica, a pro-
vider of healthcare
informatics and ven-
dor neutral, enter-
prise solutions.
Allows Fujifilm to offer a leading Vendor Neutral Archiving (VNA)
technology, strengthening Fujifilm's position in healthcare informat-
ics. The VNA software enables cross-departmental image content
sharing of patient data from disparate healthcare IT applications
while maintaining the integrity of the original data and embracing the
latest centralized archiving technologies. TeraMedica employs about
40 people and projects sales of $15-$20m in 2015. Terms not an-
nounced.

Data Management/
Healthcare IT
Mediware Information
Systems, Inc., a developer
of clinical and performance
management information
software systems.
AlphaCM, Inc., a
provider of software
solutions and ser-
vices to the behav-
ioral and mental
health industry.

Broadens Mediware’s solution set and subject matter expertise in the
mental health, developmentally disabled and substance abuse mar-
kets. AlphaCM’s expertise complements Harmony, Mediware's long
term services business unit. Terms not announced.
Data Management/
Healthcare IT
Mednax, Inc (NYSE: MD), a
$2.5b provider of maternal-
fetal, newborn, pediatric,
anesthesia other pediatric
subspecialty physician ser-
vices.
Virtual Radiologic
Corporation
(vRAD)f, a provider
of IT and teleradiol-
ogy services.
Mednax sees vRAD as a key platform for growth in teleradiology and
the broader telemedicine market. Radiology is a large, fragmented in-
dustry with total revenue of roughly $18b and is evolving rapidly to
include teleradiology as an economic and clinical necessity for cus-
tomers. The acquisition further broadens Mednax's scope of services
to hospitals, and provides advanced information technology and data
analytics. vRad has a network of more than 350 U.S. board-certified
and eligible radiologists and interprets over 5 million patient diagnos-
tic imaging studies annually which are included in vRad’s proprietary
picture archiving and communication system (PACS). It provides radi-
ology coverage to over 2,100 healthcare facilities across all 50 states


17

Sector
Acquiror
Target
Analysis
and internationally. Deal value -- $500.0m on revenue of $185.0m
(2.7x).

Data Management/
Healthcare IT
Medytox Solutions, Inc
MMMS, a $76m provider
of clinical testing services,
laboratory information sys-
tems and medical billing
functions.
CollabRx, Inc, an in-
formatics company
focused on the in-
terpretation of com-
plex molecular and
genetic tests in can-
cer.
The stock merger combines technology with vertical integration for
Medytox. CollabRx focuses on genomics-based medicine with specific
insights from cancer experts to support more informed decision-mak-
ing in cancer. Medytox equity holders will own 90% and CollabRx eq-
uity holders 10% in the combined company. Medytox has a market
cap of $95.2M. CollabRx's revenue are under $500k. Terms not an-
nounced.

Data Management/
Healthcare IT
TriCore Reference Labora-
tories, a medical and diag-
nostic lab.
Rhodes Group, a
consulting and infor-
mation technology
services company
focused on the
healthcare industry.

The combined company will provide laboratory solutions in popula-
tion health management, lab management, consulting, financial ser-
vices, and leading IT and software platforms. The deal leverages Tri-
Core's current IT platform providing better healthcare solutions for
various key stakeholders including health systems, providers, payers
and patients. Terms not disclosed.
Data Management/
Healthcare IT
Vasomedical, Inc. (OTC:
VASO), a $35.3m manufac-
turer of non-invasive de-
vices and diagnostics for
cardiovascular diseases.
NetWolves, LLC, a
provider of network
monitoring and de-
vice management
solutions.
The acquisition eliminates Vasomedical's need to build technology in-
frastructure for its recently launched healthcare IT business. It further
expands its business into network services. NetWolves will be inte-
grated into Vasomedical's healthcare IT business to provide imple-
mentation, training and support services. Deal terms -- $18m on sales
of $30m (0.6x) EBITA of $1.4m (12.9x).

Dental
Straumann Holding AG
(NYSE:STMN.SW), a maker
of dental implants, oral tis-
sue regeneration and pros-
thetics products.
NEODENT, a Brazil-
based developer of
dental implants and
related prosthetic
components.
Strengthens Straumann's penetration in the Brazilian and Latin Ameri-
can markets. Neodent is a leading brand in one of the most attractive
tooth replacement markets. Deal value -- $218.3m for the 51% stake
Straumann did not acquire in 2012. Straumann had an option to buy
the 51% balance. Neodent's 2014 revenue was $82.8m.

Diagnostics
Allscripts Healthcare Solu-
tion. Inc. (NASDAQ:
MDRX), a $1.37b provider
A 10% equity posi-
tion in NantHealth,
LLC, a provider of
This is an investment and commercial agreement to develop an inte-
grated, evidence-based, personalized approach to healthcare solu-
tions, and specifically cancer care. The companies will use Allscripts'


18

Sector
Acquiror
Target
Analysis
of healthcare information
technologies.
genomic and pro-
tein-based molecu-
lar diagnostics test-
ing services.
scale, global network of hospital and physician clients and software
solutions, combined with NantHealth's clinical platform, applications
and connectivity devices, to build the infrastructure for new personal-
ized, precision medicine programs to improve cancer care. Evidence-
based clinical decisions are improved by using specifically matched
cancer protocols and drugs, delivered to the patient based on the in-
dividual's unique DNA, RNA and proteomic profile, and integrated
with the patient's holistic clinical picture. Allscripts is buying the 10%
NantHealth interest for $200m, and NantCapital, an affiliate of
NantHealth made a $100m investment into Allscripts.

Diagnostics
Audax Management Com-
pany, LLC., a private equity
firm.
Medical Measure-
ment Systems B.V.,
a Netherlands-
based developer of
gastrointestinal di-
agnostics and uro-
dynamic technolo-
gies.
Extends the global reach and product line offerings of Audax portfolio
company LABORIE Medical Technologies, a Canada-based manufac-
turer of consumables used in urological, gynecological, and colorectal
applications. The bolt-on acquisition follows LABORIE's purchase of
Unisensor AG, a Switzerland-based developer of high resolution sen-
sors used in gastroenterology and urology diagnostics, in late 2014.
Terms not announced.

Diagnostics
Bio-Techne Corporation
(NASDQ: TECH), a $426.6m
maker of biotech products
and clinical diagnostic con-
trols.
Cliniqa Corporation,
a manufacturer of
clinical diagnostic
controls to verify
the operation of in-
vitro diagnostic
(IVD) devices.
Cliniqa specializes in quality controls, calibrators and reagents used in
the clinical diagnostic market, with a primary focus on blood chemis-
try. Its' controls and reagents are used in a wide variety of diagnostic
tests for such pathologies as cardiac disease, diabetes, cancer, immu-
nological disorders, therapeutic drug monitoring, urine analysis and
toxicology. The deal strengthens Bio-Techne's Clinical Controls prod-
uct portfolio and expands its reach into IVD/Clinical Diagnostics.
Cliniqa has 75 employees. Deal terms not announced.

Diagnostics
Eurofins Scientific SE
(EUFI.PA), a $1.41b Euro-
pean-based provider of
bio-analytical testing and
genomic services.
Diatherix Laborato-
ries, Inc., a U.S. pro-
vider of multiplex
molecular diagnostic
testing services.
Diatherix strengthens Eurofins' growing footprint in the specialty clini-
cal diagnostics market. It adds molecular diagnostic testing services,
featuring a patented molecular multiplex technology, TEM-PCR (Tar-
get Enriched Multiplex Polymerase Chain Reaction), that rapidly iden-
tifies DNA/RNA of multiple pathogens in a single sample and performs
specific genetic drug resistance diagnostics in six hours. The deal


19

Sector
Acquiror
Target
Analysis
complements Eurofin's $255m purchase of ViraCor, a reference labor-
atory focused on biologic and large molecular biomarkers. Diatherix
employs around 100 people and serves nearly 7,000 providers across
the U.S. Deal terms -- $50m on sales of $40m (1.3x).

Diagnostics
Eurofins Scientific SE
(EUFI:PA), a $1.41b Euro-
pean-based provider of an-
alytical testing services to
the pharmaceutical, food,
and environmental mar-
kets.
Biomnis Group, a
provider of spe-
cialty/esoteric diag-
nostic testing ser-
vices in France and
Ireland with focus
on molecular biol-
ogy and cytogenet-
ics.
Biomnis is one of the largest independent laboratories in Europe fo-
cusing on specialty diagnostic testing, with strength in infectious dis-
eases. The addition of Biomnis to the Eurofins network would
strengthen the Group's pharmaceutical and genomic service offering,
and consolidate its growing presence in the specialty diagnostic test-
ing sector, Biomnis employs about 1,200 staff, provides its services in
more than 40 countries and has generated over $264 revenues in
2014, 75% of which from specialty diagnostics services. Following the
recent Biomnis restructuring, Eurofins expects that the company's
EBITDA margin should progressively expand from the current low
double-digit level towards industry standards and Eurofins' objective
over the next few years. Deal value -- $249.6m on revenue of $264m
(0.9x) and EBITDA of ~$27.4m (9.2x).

Diagnostics
Opko Health, Inc.
(NYSE:OPK), a $99m bio-
pharmaceutical and diag-
nostics company.
Bio-Reference La-
boratories, Inc.
(BRLI), a provider of
clinical laboratory
testing services.
Gives Opko, a company created by billionaire Phillip Frost, access to
Bio-Reference Labs’ genetics and genomics data, for personalized
drug development. Opko will also use Bio-Reference’ laboratory ser-
vices and distribution channels to increase sales of its 4Kscore test,
used to diagnose prostate cancer. OPKO, with only $99 million of an-
nual revenue, is much smaller than BRLI and has only a small pres-
ence in the clinical laboratory-testing marketplace, but the acquisition
will make OPKO one of the nation’s larger medical laboratory compa-
nies. In 2012, OPKO bought OURLabs, an anatomic pathology refer-
ence laboratory offering gastrointestinology and dematopathology
services. OURLabs owned the proprietary 4Kscore Test, which pro-
vides a personalized risk profile for aggressive prostate cancer. Stock
merger, with a value of $1.47b on sales of $882.5m (1.67x) and
$115.9m in EBITDA (12.7x).


20

Sector
Acquiror
Target
Analysis
Diagnostics
Quest Diagnostics Inc.
(NYSE: DGX), a $7.5b pro-
vider of diagnostic testing
and information services.
The laboratory out-
reach service busi-
ness of Memorial-
Care Health System,
a nonprofit inte-
grated delivery sys-
tem in California.
Pursuant to the deal, MemorialCare Health System will transition its
outreach laboratory testing to Quest's accredited full-service clinical
laboratory in California. Once the acquisition is completed, patients
and physicians will have access to Quest's broad menu of innovative
services, including next generation sequencing, and Quest's network
of nearly 200 patient service centers in southern California. Enables a
larger number of physicians and patients in southern California to
benefit from Quest's diagnostic systems. Terms not announced.

Diagnostics
Roche Holding AG (OTC:
RHHBY), a $51.0b Switzer-
land-based pharmaceuti-
cals and diagnostics com-
pany focused on oncology,
virology, inflammation, and
metabolic disorders.

CAPP Medical, a de-
veloper of next-gen-
eration sequencing
blood analyzers for
monitoring tumor
therapy responses.
Gives Roche a platform that detects and monitors circulating tumor
DNA (ctDNA) in blood with potential applications for cancer therapy
selection and monitoring tumor response. Terms not announced.
Diagnostics
Rosetta Genomics Ltd.
(NASDAQ:ROSG), a $1.33M
biotech biotech company
focused on molecular test-
ing of cancers and other
life threatening diseases.
Cynogen Inc.,
(d/b/a Personal-
izeDx), a unit of
Prelude Corpora-
tion, a molecular di-
agnostics and ser-
vices company fo-
cused on genomic
FISH (fluorescence
in-situ hybridization)
technology.
Rosetta gains proprietary FISH tests in prostate, bladder and lung can-
cer, strong commercial and laboratory operations capabilities and a
state-of-the-art, high-complexity CLIA laboratory in California. Other
notable products include ERG (launched in 2014), a proprietary prog-
nostic test for patients with prostate cancer with annual U.S. market
testing of approximately $100m; FGFR3 mutation analysis, which
identifies low-grade bladder cancer from urine and tissue-based spec-
imens (expected to launch late in 2015) with a U.S. market oppor-
tunity of approxately $250m. In addition, Rosetta gains rights to mar-
ket Prelude’s novel assay for ductal carcinoma in situ (DCIS), helping
avoid overly aggressive therapies that contribute to healthcare costs
and increasing morbidity -- a $200m annual U.S. market opportunity.
With the inclusion of PersonalizeDx's pipeline, Rosetta Genomics is
poised to launch five novel, differentiated assays within the next 12
months. Terms -- $2m of cash plus stock.


21

Sector
Acquiror
Target
Analysis
Diagnostics
VWR International, LLC
(NASDAQ: VWR), a $4.35b
provider of laboratory sup-
plies, equipment and ser-
vices.
Hichrom Ltd., a
maker of high per-
formance liquid
chromatography
(HPLC) columns and
consumables.
Builds upon VWR's existing chromatography systems, HPLC columns
and consumables portfolio, expanding its capabilities to better sup-
port the HPLC user community across many industries. Hichrom sells
many of the world's leading brands of HPLC and ultra high perfor-
mance liquid chromatography (UHPLC) columns. As a manufacturer,
Hichrom is well regarded in its field for its extensive knowledge and
capabilities in silica bonding, silane chemistry and column packing.
Terms not announced.

Distribution
Cardinal Health Inc., a
$94b pharmaceutical and
medical products and ser-
vices company.
Harvard Drug
Group, a distributor
of generic and over-
the-counter drugs.
Increases Cardinal's distribution of generics and OTC drugs and re-
lated products to retail, institutional and alternate care customers.
Also broadens Cardinal's telesales capabilities. Cardinal follows an ac-
quisition-driven strategy and focuses on investment in key growth
businesses to gain market traction and boost profits. Over the past
five years, the company executed four large acquisitions AssuraMed
(2013), Kinray (2010), Cardinal Health China (2010) and Healthcare
Solutions Holding (2010) which have considerably enhanced the com-
pany’s offerings in diversified fields. There are 450 employees and
two distribution facilities included in the transaction. Deal value --
$1.12b on $450m of revenue. Court Square Capital Partners, a pri-
vate-equity firm, bought Harvard Drug in 2010 for an undisclosed
price.

Distribution
Cardinal Health, a $94b
pharmaceutical and medi-
cal products and services
company.
Metro Medical, a
large independent
specialty distributor.
Dramatically expands Cardinal's small specialty distribution business
while gaining access to new practice settings. The deal moves Cardi-
nal closer to the specialty businesses of AmerisourceBergen and
McKesson. Independent physician offices and outpatient clinics are
the largest customer group for specialty distributors. These sites are
privately owned, community-based centers that have office space as
a direct cost to the physician and not typically in a hospital outpatient
department area. The largest specialty distributors are divisions of
full-line wholesalers. These include the distributors in Amerisource-
Bergen Corporation’s Specialty Group (Oncology Supply, ASD
Healthcare, and Besse Medical) and McKesson Specialty Health (a


22

Sector
Acquiror
Target
Analysis
business unit of McKesson Corporation). Metro’s oncology distribu-
tion business complement Cardinal’s existing operations. Metro has a
presence in rheumatology and nephrology offices, two segments
where Cardinal has minimal share. Terms not announced.

Distribution
Claflin Medical Equipment
(CME), a distributor of
medical equipment & hos-
pital equipment products.
RSI Equipment, Inc,
a distributor of
medical equipment,
casework/cabinetry,
office furniture,
storage systems and
specialty products.
With CME’s recent merger of Hospital Associates in February 2015,
this acquisition joins three organizations which specialize in the pro-
curement and delivery of medical equipment to hospitals and
healthcare facilities. By combining forces, they now cover the entire
country with three branches, 31 service centers and 30 sales repre-
sentatives. Terms not announced.
Distribution
Lifehealthcare Group
(ASX:LHC), an Australian-
based distributor of
healthcare equipment to
hospitals and clinics.
M4 Healthcare Pty
Ltd., a distributor of
point of care ultra-
sound equipment in
Australia and New
Zealand.

Enhances Lifehealthcare's core distribution business. Deal terms --
$7.04m (plus $0.6m in earnouts) on revenue of $9.0m.
Medical Devices
Addtech AB (ADDTB:Stock-
holm), a Sweden-based
$6.78b diversified provider
of instruments, diagnostic
equipment and engineering
products.

Mediplast AB, a
Sweden-based de-
veloper of equip-
ment and medical
disposable products
for hospitals.
Mediplast AB is a leading Nordic supplier of medical technology
equipment and consumables. The company holds a strong position in
the Nordic countries and markets both its own products as well as
those of leading suppliers for surgery, intensive care and
thorax/neuro. The acquisition provides Addtech with entry into the
field of medical technology for the Life Sciences. Deal terms -
$57.13m.

Medical Devices
Audax Management Com-
pany, LLC, a private equity
firm.
Katena Products
Inc., a provider of
ophthalmic surgical
instrumentation and
bioactive inlays.
Provides Audax with a platform to enter the ophthalmic instrument
and biologics market. Katena was bought from private equity firm
Cortec Group, which acquired Katena in 2009. Cortec Group also ac-
quired IOP Ophthalmics, a developer of ophthalmic biologic products,
to expand Katena's instrument specialty to include preserved human
tissues for use in glaucoma and oculoplastic surgeries. The Walden
Group represented Katena in its sale to Cortec and initiated the add-


23

Sector
Acquiror
Target
Analysis
on transaction of IOP in 2014. The Audax Group intends to further
Katena's organic growth and employ a bolt-on acquisition strategy.
Terms not announced.

Medical Devices
B. Braun Medical Inc., a
developer of infusion ther-
apy and pain management
devices.
Lauer Membran
Wassertechnik
GmbH, a German-
based manufacturer
of stainless steel di-
alysis water treat-
ment systems.

Lauer manufactures one of the world’s leading premium water treat-
ment systems for dialysis. Lauer and B. Braun have enjoyed a strong
partnership in the dialysis market for several years. Through this ac-
quisition, B. Braun strengthens its position as a system provider for di-
alysis therapy. Lauer employs 75 people. Terms not announced.
Medical Devices
Boston Scientific Corpora-
tion (NYSE: BSX), a $7,27b
manufacturer interven-
tional medical products.
An equity stake in
Suzhou Franken-
man Medical Equip-
ment Co., Ltd., a
Chinese medical de-
vice company fo-
cused on surgical
staplers.
The companies will co-develop and manufacture products in China,
with some products commercialized jointly. Enables Boston Scientific
to build an endoscopy business in China, overcoming the significant
barrier to entry for foreign companies due to the complex regulatory
framework required and the "Buy China" policies favoring domestic
manufacturers. Boston Scientific will provide services and expertise
in endoscopy to Frankenman to support its continued growth, devel-
opment pipeline and manufacturing capabilities. Each year more than
1 million bile duct stone removal procedures in China are performed
as open surgeries; less invasive endoscopic procedures can fulfill a
large unmet market need to improve outcomes and reduce health
care costs. Terms not disclosed.

Medical Devices
BSN Medical GmbH & Co.
KG, a global maker of
products for wound care,
vascular diseases, lymphol-
ogy and orthopaedic condi-
tions.
FarrowMed LLC, a
maker of patented
Elastic Short Stretch
compression wraps
for lymphatic and
venous disorders.
Farrowmed's FarrowWrap® provides a compression therapeutic gar-
ment that is easier to use by patients compared to traditional com-
pression stockings. FarrowWrap® encourages patient independence
and compliance resulting in more effective treatment and mainte-
nance. The deal allows BSN to offer more comprehensive manage-
ment solutions to the growing patient population suffering from
lymphedema and wounds associated with chronic venous insuffi-
ciency. BSN aims to build a leading position in lymphology. Farrow-
Wrap will be distributed through BSN's global sales network.


24

Sector
Acquiror
Target
Analysis
Founded in 2004, Farrowmed employs 33 persons. Deal terms not
disclosed.

Medical Devices
Elos AB (ELOSB:Stock-
holm), a $45.4m Switzer-
land-based manufacturer
of high precision dental
and orthopedic implant
components.
Onyx Medical Corp.,
an OEM producer of
components for
trauma and extremi-
ties devices.
Helps Elos better penetrate the North American orthopedic, trauma
and extremities markets, which represent approximately 50% of the
world market (Elos). Onyx Medical has 120 employees and a 53,000
s.f. facility. Terms not announced.
Medical Devices
Hill-Rom, Inc. (NYSE: HRC),
a $1.8b provider of patient
care systems, surgical
safety equipment and res-
piratory products.
Welch Allyn, Inc., an
OEM of examination
instruments and di-
agnostics.
Provides Hill-Rom with an established, well-known portfolio of point
of care devices and diagnostics that address a range of call points, in-
cluding primary care, nurses, hospitalists, and specialists. The deal
enhances Hill-Rom's already leading position in operating room solu-
tions revolving around patient-care, scales operations generally, and
widens its geographic reach. Welch Allyn's products support the coor-
dination of care across settings and maximize inter-operability of
many of Hill-Rom's devices. Through facility combinations, procure-
ment efficiencies and other expense reductions, the deal is expected
to produce an annual run-rate cost savings of over $40m by 2018.
Deal terms -- $2.05b on revenue of ~$700m.

Medical Devices
Leica Microsystems GmbH,
a Germany-based manufac-
turer of optical micro-
scopes and related prod-
ucts.
Bioptigen, Inc., a
developer of optical
coherence tomogra-
phy (OCT) imaging
systems.
Adds OCT imaging capabilities to Leica Microsystems's surgical micro-
scopes, strengthening Leica's position in the ophthalmology market.
Bioptigen's OCT platforms use low-power, near-infrared light to gen-
erate high-resolution, volumetric images of the eye. OCT imaging is a
non-invasive technique used to detect and monitor morphological
changes of ocular tissue, in particular retinal layer thickness, to diag-
nose glaucoma, age-related macular degeneration or diabetic reti-
nopathy and other conditions. Terms not announced.

Medical Devices
Lima Corporate spa, an It-
aly-based maker of ortho-
paedic reconstructive and
trauma devices.
Certain joint re-
placement products
of Zimmer Biomet,
As part of the antitrust divestitures associated with the Zimmer-Bi-
omet merger, this deal includes the Zimmer® Unicompartmental High
Flex Knee (ZUK) and the Biomet® Discovery Elbow System within the


25

Sector
Acquiror
Target
Analysis
Inc., a maker of or-
thopaedic recon-
structive products;
sports medicine,
and biologic prod-
ucts.

European Economic Area (EEA) and Switzerland markets, and the Bi-
omet® Vanguard Complete Knee System for Denmark and Sweden.
The total knee replacement market in Europe was estimated to be
more than $1b in 2013 and is expected to continue to grow. Terms
not announced.
Medical Devices
Madison Dearborn Part-
ners (MDP), a private eq-
uity firm.
The medical device
unit of Patterson
Companies, a maker
of sports medicine
and occupational
and physical therapy
products.
The divestiture of Patterson Medical -- and the recent acquisition of
Animal Health International -- are transformational moves for Patter-
son Companies. Patterson’s strategy for growth is building its dental
and animal health businesses. MDP has a long history of successfully
investing in health care across a range of sub-sectors including health
care distributors such as VWR International, specialty pharmaceuti-
cals and medical products, hospitals, home and community-based
care, skilled nursing facilities and life sciences. Recent investments in-
clude Ikaria, Kaufman Hall, Option Care and Sage Products. Deal value
-- $715m on sales of $464.2m (1.54x) and EBITDA of $67.2m (10.64x).

Medical Devices
Medical Depot, Inc. (dba
Drive Medical), a manufac-
turer of durable medical
equipment, including mo-
bility products, beds, bari-
atric products, wheelchairs,
and pressure prevention
products.

DeVilbiss
Healthcare, a global
manufacturer of res-
piratory and sleep
products.
The acquisition will provide Drive with a platform in the respiratory
and sleep areas, while increasing its manufacturing capabilities and
expanding its growing presence in Europe. DeVilbiss is a global manu-
facturer of respiratory and sleep products distributed in over 80 coun-
tries, with distribution centers located throughout North America, as
well as France, Germany, the Netherlands, United Kingdom, Australia
and China. Terms not disclosed.
Medical Devices
Medical Depot, Inc. (dba
Drive Medical), a manufac-
turer of durable medical
equipment.

Columbia Medical
Mfg. Corp, a maker
of rehabilitation
products for chil-
dren with multiple
sclerosis and other
conditions.
Enables Drive to expand its presence in the pediatric market. Colum-
bia will provide an additional sales platform for Drive's existing Wen-
zelite pediatric