Healthcare MA Report Q1 '17 - Hyde Park 500 Nasdaq SP Global Healthcare Index ... Source: SP...

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  • HealthcareM&AReport

    Q12017

    HYDEPARKCAPITAL

    Member FINRA/SIPC

    Investment Banking | Mergers & Acquisitions | Capital Raising

    HydeParkCapitalAdvisors,LLC701 N. Franklin StreetTampa, FL 33602Tel: 813-383-0202www.hydeparkcapital.com

    JohnHillSeniorManagingDirectorhill@hydeparkcapital.com(813) 383-0205JohnMcDonaldSeniorManagingDirectormcdonald@hydeparkcapital.com(813) 383-0206KeithHodgdonManagingDirectorhodgdon@hydeparkcapital.com(813) 383-0208GregBoslVicePresidentbosl@hydeparkcapital.com(813) 597-2649 JamiGoldVicePresidentgold@hydeparkcapital.com(813) 383-0203CharlieHendrickVicePresidenthendrick@hydeparkcapital.com(813) 383-0207JeffreyHendricksVicePresidentjhendricks@hydeparkcapital.com(678) 523-3073

  • 80%90%

    100%110%120%130%

    Mar-16 Jun-16 Sep-16 Dec-16 Mar-17S&P 500 Nasdaq S&P Global Healthcare Index

    PublicMarketPerformance(LTM)

    SelectPublicOfferings Healthcare(Q12017)

    PublicCompanyMarketPerformancebySector

    Source:S&PCapitalIQ

    Capital MarketsOverview Healthcare

    Major market indices including the Nasdaq, S&P 500 and S&PGlobal Healthcare Index posted positive results over the 12 monthperiod ended March 31, 2017, increasing 20.3%, 14.0%, and 6.2%,respectively.The table to the right highlights select public offerings completed inthe Healthcare industry during Q1 2017. Jounce Therapeutics, Inc.(NasdaqGS: JNCE) a clinical stage immunotherapy company,completed the largest IPO during the quarter, raising $102 millionfrom investors.From a valuation perspective, the Healthcare Equipment & Suppliesand Healthcare Technology sectors continued to trade at strongmultiples of revenue at 4.6x and 3.0x, respectively.

    Commentary

    20.3%

    HYDEPARKCAPITALInvestment Banking | Mergers & Acquisitions | Capital Raising

    14.0%

    2

    6.2%

    IndustrySector 3Months 12months Revenue EBITDAHealthcare Facilities 16.8% 4.1% 1.1x 8.4xHealthcare Services 6.7% 12.5% 1.9x 10.2xManaged Healthcare 4.9% 18.3% 0.5x 8.4xHealthcare Technology 14.4% 2.6% 3.0x 15.5xHealthcare Equipment & Supplies 11.5% 18.7% 4.6x 17.2xHealthcare Distribution 5.2% (2.4%) 0.3x 9.8x

    MedianChangeinStockPrice EnterpriseValue/LTM

    OfferDate Issuer IndustrySector IPO/SecondaryOfferingSize

    ($mm)01/10/17 Amgen, Inc. Pharmaceuticals Fixed-Income $4,95702/28/17 Pfizer, Inc. Pharmaceuticals Fixed-Income $4,51702/28/17 Johnson & Johnson Pharmaceuticals Fixed-Income $4,49003/02/17 Kite Pharma, Inc. Biotechnology Secondary $35603/07/17 Cotiviti Holdings, Inc. Health Care Technology Secondary $30301/03/17 Clovis Oncology, Inc. Biotechnology Secondary $20503/29/17 Blueprint Medicines Corp. Biotechnology Secondary $20003/01/17 Dermira, Inc. Pharmaceuticals Secondary $16901/19/17 Heron Therapeutics, Inc. Biotechnology Secondary $15001/26/17 Jounce Therapeutics, Inc. Pharmaceuticals IPO $102

  • As detailed in the charts below, Healthcare Middle Market M&Atransaction volume decreased during 2016 compared to 2015,while the value of completed transactions rose modestly.Middle Market Healthcare deal volume fell 10% throughout 2016 to333 completed transactions, down from 369 during the prior yearperiod. Despite the drop in deal volume, the total value ofcompleted transactions increased 1% to $48.5 billion.Although Middle Market Healthcare M&A activity declinedthroughout the year, completed deal volume and deal valueincreased for transactions valued between $500 million and $1billion, rising 36% and 27%, respectively.

    Commentary

    U.S.MiddleMarketM&AActivity AnnualTrends:VOLUME U.S.MiddleMarketM&AActivity AnnualTrends:VALUE

    Total Transac

    tion Value ($ i

    nbillions)

    AnnualMiddleMarketM&AActivity Healthcare

    3Source:S&PCapitalIQ(middlemarketincludesallcloseddealswithdiscloseddealvaluebetween$10millionand$1billion).Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000M

    ($inbillions)

    MiddleMarketM&ATransactionsbyDealSize Healthcare

    Total Transac

    tion Volume

    HYDEPARKCAPITALInvestment Banking | Mergers & Acquisitions | Capital Raising

    DealSize Volume Value Volume Value Volume ValueLess than $100M 248 $9.1 215 $7.7 (13%) (15%)$100 - $499M 99 $22.9 88 $20.6 (11%) (10%)$500 - $999M 22 $16.0 30 $20.3 36% 27%TotalMiddleMarket 369 $48.0 333 $48.5 (10%) 1%

    %ofMiddleMarketLess than $100M 67% 19% 65% 16%$100 - $499M 27% 48% 26% 42%$500 - $999M 6% 33% 9% 42%TotalMiddleMarket 100% 100% 100% 100%

    2015 2016 %Change

  • QuarterlyMiddleMarketM&AActivity Healthcare

    U.S.MiddleMarketM&AActivity QuarterlyTrends:VALUEU.S.MiddleMarketM&AActivity QuarterlyTrends:VOLUME

    MiddleMarketM&ATransactionsbyDealSize Healthcare

    ($inbillions)

    Total Transac

    tion Value ($ i

    nbillions)

    4

    Commentary

    Source:S&PCapitalIQ(middlemarketincludesallcloseddealswithdiscloseddealvaluebetween$10millionand$1billion)

    As detailed in the table on the right, Middle Market M&A activity inthe Healthcare industry fell during Q1 2017 to 48 closedtransactions, a 56% decrease from the 110 transactions closed inQ1 2016.The total value of completed Middle Market Healthcare deals fell50% to $7.6 billion in Q1 2017, down from $15.2 billion in theprior year period, with the largest decline in transactions valuedbetween $100 million and $499 million.Transactions valued between $500 million and $1 billion had thesmallest declines during Q1 2017 as deal volume in this size rangefell 29% and completed deal value dropped 13%.

    Total Transac

    tion Volume

    Less than $100M $100 - $499M $500 - $1,000M Less than $100M $100 - $499M $500 - $1,000MHYDEPARKCAPITALInvestment Banking | Mergers & Acquisitions | Capital Raising

    Source:S&PCapitalIQ(middlemarketincludesallcloseddealswithdiscloseddealvaluebetween$10millionand$1billion)

    DealSize Volume Value Volume Value Volume ValueLess than $100M 70 $2.5 34 $1.2 (51%) (53%)$100 - $499M 33 $7.9 9 $2.3 (73%) (71%)$500 - $999M 7 $4.8 5 $4.1 (29%) (13%)TotalMiddleMarket 110 $15.2 48 $7.6 (56%) (50%)

    %ofMiddleMarketLess than $100M 64% 17% 71% 16%$100 - $499M 30% 52% 19% 30%$500 - $999M 6% 31% 10% 54%TotalMiddleMarket 100% 100% 100% 100%

    Q12016 Q12017 %Change

  • RecentM&AActivity Healthcare

    SelectAnnouncedM&ATransactions(Q12017)

    5Source:S&PCapitalIQ.*DenotesHydeParkCapitalTransaction.HYDEPARKCAPITALInvestment Banking | Mergers & Acquisitions | Capital Raising

    AnnouncedDate Target Buyer IndustryEnterpriseValue($mm)

    EV/Revenue

    EV/EBITDA03/29/17 AllDocuments, Inc. iHealth Innovations, LLC Healthcare Services NA NA NA

    03/28/17 Bracket Global, LLC Genstar Capital Health Care Technology NA NA NA03/22/17 Hometown Hospice & Homecare, Inc. JPB Capital Partners Healthcare Services NA NA NA03/14/17 Air Methods Corporation American Securities Healthcare Services $2,486.5 2.1x 8.7x03/13/17 HCRIX Royal, LLC The Blackstone Group Healthcare Facilities $17.1 NA NA02/20/17 Southern Anesthesia & Surgical, Inc. ACE Surgical Supply Co., Inc. Healthcare Distributors NA NA NA02/14/17 NuvoLase, Inc. Innoveas International Ltd. Healthcare Equipment NA NA NA02/14/17 Cynosure, Inc. Hologic, Inc. Healthcare Equipment $1,479.4 3.4x 25.9x02/13/17 ZELTIQ Aesthetics, Inc. Allergan plc Healthcare Equipment $2,414.9 6.8x 143.3x02/09/17 Pharm-Olam International, Ltd. Quad-C Management, Inc. Pharmaceuticals NA NA NA02/09/17 Medin Technologies, Inc. Seven Point Equity Partners Healthcare Supplies NA NA NA02/08/17 Integrity Tracking, LLC ABRY Partners Healthcare Equipment $130.0 NA NA02/06/17 Catheter Connections, Inc. Merit Medical Systems, Inc. Healthcare Supplies $38.0 NA NA02/01/17 American HealthCare Staffing Association, LLC BelHealth Investment Partners Healthcare Services NA NA NA02/01/17 Trident Health Resources, Inc.* SpecialtyCare, Inc. Healthcare Services NA NA NA01/26/17 Delinia, Inc. Celgene Corp. Pharmaceuticals $775.0 NA NA01/25/17 CoverMyMeds, LLC McKesson Corp. Health Care Technology $1,400.0 NA NA

  • RecentM&AActivity Healthcare

    SelectAnnouncedM&ATransactions(Q12017)

    6Source:S&PCapitalIQ.HYDEPARKCAPITALInvestment Banking | Mergers & Acquisitions | Capital Raising

    AnnouncedDate Target Buyer IndustryEnterpriseValue($mm)

    EV/Revenue

    EV/EBITDA01/19/17 Physician Resource Management, Inc. AssistRx, Inc. Health Care Technology NA NA NA

    01/18/17 CoLucid Pharmaceuticals, Inc. Eli Lilly and Co. Pharmaceuticals $860.6 NA NA01/18/17 Healthcare Data Solutions, LLC Aprima Medical Software, Inc. Health Care Technology NA NA NA01/17/17 Pediatric Services of America, Inc. J.H. Whitney & Co. / Bain Capital Private Equity Healthcare Services NA NA NA01/12/17 Excel Companion Care, Inc. Help at Home, Inc. Healthcare Services NA NA NA01/11/17 Sequel Youth and Family Services, LLC Global Partner Acquisition Corp. Healthcare Services $317.1 NA 10.1x01/10/17 Derma Sciences, Inc. Integra LifeSciences Holdings Corp. Healthcare Supplies $160.4 1.8x NA01/10/17 Home Health Investments, LLC Jet Health, Inc. Healthcare Services NA NA NA01/09/17 VCA, Inc. Mars, Inc. Healthcare Facilities $9,084.6 3.6x 18.4x01/09/17 ARIAD Pharmaceuticals, Inc. Takeda Pharmaceuticals U.S.A., Inc. Pharmaceuticals $5,139.0 27.6x NA01/09/17 Surgical Care Affiliates, Inc. Optum, Inc. Healthcare Facilities $4,162.9 3.3x 12.3x01/09/17 Dendreon Pharmaceuticals, Inc. Sanpower Group Co., Ltd. Pharmaceuticals $819.9 NA NA01/06/17 PatientCrossroads, Inc. Invitae Corp. Health Care Technology $15.0 NA NA01/05/17 Sinol USA, Inc. Leone Asset Management, Inc. Healthcare Supplies NA NA NA01/04/17 Care Advantage, Inc. BelHealth Investment Partners Healthcare Services NA NA NA01/04/17 New York E