Healthcare IT M&A Sees Increase in 2014
A recent report by Berkery Noyes, an independent mid-market investment bank, has found that healthcare mergers and acquisitions (M&A) have consistently been on the rise in 2014, garnering an aggregate value of $5.45 billion.
The report analyzed M&A activity during the first half of the year and compared it with four previous six-month periods from 2012 to 2013 and included information and technology companies that service pharmaceutical, healthcare payer and healthcare provider spaces.
Total deal volume increased 18 percent since the second half of 2013, with the median revenue multiple decreasing from 2.5x to 2.0x over the past six months. Deal volume in the healthcare IT segment increased by 17 percent, from 65 to 76 transactions, making it the largest increase on a half year basis throughout the past two-and-a-half years, the report stated.
“In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes, in a news release. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are long term care information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.”
“Financial buyers also have over $500 billion of dry powered which they can leverage 4x-8x times. It is a seller’s market as with all the attractive dynamics noted above there remains a lack of quality assets of scale available so any attractive assets commands high valuation and multiple buyers,” added O’Connor.
Additional markets covered in the report included pharma IT, which saw a volume increase from 15 to 24 transactions. The largest deal in both the segment and overall industry was Dassault Systemes’ acquisition of Accelrys Software, a provider of scientific lifecycle management software for chemistry, biology, and materials research, for $652 million. Consumer Healthcare increased from 16 to 21 transactions and the healthcare Business Services segment improved from 44 to 49 transactions.
“A broad range of information, data, technology, knowledge management solutions, and services are leading to end-to-end offerings for the pharmaceutical, biotechnology, and life sciences industries. Evidence-based marketing is a key trend in this segment, with its emphasis on data, science, pharmacoeconomics, and comparative effectiveness,” said Jeffrey Smith, Managing Director at Berkery Noyes.
“We expect to see continued robust new business formation in the life sciences commercialization space, with an emphasis on proprietary intellectual property assets, new software analytics, regulated content solutions, patient engagement, mobile, and global platforms,” added Jeffrey Smith, Managing Director at Berkery Noyes.
Bachem turns 50 - a timeline
Bachem, a supplier to pharmaceutical and biotechnology companies worldwide, is celebrating its 50th anniversary this month. We take a look at the Swiss company's history.
1971 - beginnings
Bachem is founded by entrepreneur Peter Grogg in Liestal, a small town near Basel in Switzerland. Grogg started the firm with just two employees, and with a focus on peptide synthesis - peptides are composed of amino acids that have a variety of functions treating health conditions such as cancer and diabetes.
1977 - 1981 - early growth
Bachem moves its headquarters to the Swiss town of Bubendorf, with eight employees. In 1978 the company produces peptides for use in medicines for the first time. In 1981 production capacity triples and the workforce grows to 150.
1987 - 1996 - worldwide expansion
The company expands into the US with Bachem Bioscience, Inc. in Philadelphia. To strengthen its presence in Europe, Bachem opens sales and marketing centres in Germany in 1988.
Further sales centres open in France in 1993. By 1995 the company employs 190 people. In 1996 it acquires the second largest manufacturer of peptides in the world and forms Bachem California with a site in Torrance.
1998 - 2003 - Bachem goes public
Bachem company goes public and lists shares on the Swiss Stock Exchange. Further acquisitions include Peninsula Laboratories, Inc, based in California, and Sochinaz SA, a Swiss-based manufacturer of active pharmaceutical ingredients. By 2001, the company has 500 employees and sales reach 141 million CHF.
In 2003 the organisation is given a new legal holding structure to support its continued growth, which remains in place to this day.
2007 - 2013 - acquisitions
Bachem acquires a brand by Merck Biosciences for ready-to-use clinical trial materials and related services.
In 2013, together with GlyTech, Inc. Bachem announces the development of a new amino acid that can help to treat multiple sclerosis, with a world market of more than $4 billion.
In 2015 it acquires the American Peptide Company (APC), which becomes integrated into Bachem Americas.
2016 - 2019 - a global leader
In 2016 the group opens a new building dedicated to R&D projects and small series production in Bubendorf. With a total of 1,022 employees, the workforce exceeds the 1,000 mark for the first time in the company’s history. Sales are over the 200 million mark for the first time at 236.5 million CHF.
Bachem expands into Asia with the establishment of a new company in Tokyo called Bachem Japan K.K.
By 2019 Bachem has a growing oligonucleotide portfolio - these are DNA molecules used in genetic testing, research, and forensics. It is hoped this will become a significant product range in the future.
2020 - COVID-19
Despite the COVID-19 pandemic, Bachem secures its supply of active ingredients, and even increases it in critical areas. Sales exceed the 400 million Swiss franc mark for the first time, and 272 new employees are hired.
2021 - a milestone anniversary
Bachem celebrates its 50th anniversary and position as a global leader in the manufacture of peptides. While it remains headquartered in Bubendorf, the company employs 1,500 people at six locations worldwide. In the next five years there are plans to continue expanding.
Commemorating the company's anniversary, Kuno Sommer, Chairman of the Board of Directors, said: "Bachem's exceptional success story from a small laboratory to a global market leader is closely linked to Peter Grogg's values, and has been shaped by innovation, consistent quality and cost awareness, as well as by entrepreneurial vision."