Interesting News in Healthcare Q3 2017

 

HEALTHCARE NEWSLETTER
Q3 2017

DEALS, INVESTMENTS

OVERVIEW: The number of deals announced involving healthcare companies continued to increase during the third quarter over the previous quarters. From 509 deals closed in the first quarter to 712 in the second quarter, the third topped out at 951 deals closed. Among the noteworthy items discussed below: Global investment firm KKR’s purchase of WebMD, including its high profile professional media segment Medscape; the PE firm also made two more significant investments in healthcare during the quarter. Also highly active during the quarter was publicly traded UDG, which also closed on three noteworthy businesses in the healthcare space. Several medical and healthcare marketing firms were traded during the quarter among strategic buyers and PE firms.

What’s driving this elevated level of deal activity? It certainly isn’t a concern amongst investors over whether the U.S. Congress will ultimately repeal, replace, or revise the Affordable Care Act, colloquially known as Obamacare. Instead, buyers in the space seem encouraged by a robust pipeline of new drugs. Also, investors seem encouraged by investment activity in digital health, including initiatives like Swiss multinational Roche’s purchase of MySugr, a digital diabetes management tool, which Roche suggested would chart new ways for treating, managing conditions and communicating between patients, providers and caregivers.

 

Details from the media over the past quarter:

KKR Has a Very Active Quarter Buying Healthcare Businesses
Private equity firm KKR announced that it would buy internet health information giant WebMD for $2.8B and add it to its Internet Brands business. KKR’s planned purchase was for $66.50 a share, a 30% premium to its stock price on Feb. 15, the day before it told shareholders it would run a process to consider a sale of the company. In March, activist fund Blue Harbour Group, run by former KKR partner Clifton Robbins, disclosed a near 9% stake in WebMD and its interest in discussing strategic alternatives with the company.
Forbes

Company TEV ($mm) Revenue ($mm) EBITDA ($mm) TEV/Rev TEV/EBITDA
WebMD 2,800 706 184.5 3.7x 14.3x

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