Pfizer to acquire Global Blood Therapeutics in $5.4bn deal

BY Fraser Tennant

In a deal that enhances its presence in rare haematology, US multinational pharmaceutical and biotechnology corporation Pfizer Inc. is to acquire biopharmaceutical company Global Blood Therapeutics, Inc. (GBT).

Under the terms of the definitive agreement, Pfizer will acquire all the outstanding shares of GBT for $68.50 per share in cash, for a total enterprise value of approximately $5.4bn, including debt and net of cash acquired.

The acquisition complements and further enhances Pfizer’s more than 30-year heritage in rare haematology and reinforces the company’s commitment to sickle cell disease (SCD) by bringing expertise and a leading portfolio and pipeline with the potential to address the full spectrum of critical needs in this underserved community.

A lifelong, debilitating inherited blood disorder characterised by haemolytic anaemia, acute pain crises and progressive end organ damage, SCD impacts millions of people worldwide, predominantly in populations of African, Middle Eastern and South Asian descent.

“This transaction is an exciting milestone that accelerates GBT’s mission to discover, develop and deliver life-changing treatments that provide hope to underserved patient communities,” said Ted W. Love, president and chief executive of GBT. “Pfizer will broaden and amplify our impact for patients and further propel much-needed innovation and resources for the care of people with SCD and other rare diseases, including populations in limited-resource countries.”

Pfizer intends to continue to build on GBT’s shared commitment to and engagement with the SCD community by accelerating distribution of its innovative treatment – voxelotor tablets – to parts of the world most impacted by SCD.

“The deep market knowledge and scientific and clinical capabilities we have in rare hematology will enable us to accelerate innovation for the SCD community and bring treatments to patients as quickly as possible,” said Albert Bourla, chairman and chief executive of Pfizer. “We are excited to welcome GBT colleagues into Pfizer and to work together to transform the lives of patients, as we have long sought to address the needs of this underserved community.”

The boards of both companies have unanimously approved the transaction, which is subject to customary closing conditions, including receipt of regulatory approvals and approval by GBT’s stockholders.

Mr Love concluded: “We look forward to working together with Pfizer to serve our communities and advance our shared goal of improving health equity and expanding access to life-changing treatments to create a healthier future for all.”

News: Flush with cash, Pfizer buys Global Blood Therapeutics in $5.4 billion deal

iRobot acquired by Amazon

BY Richard Summerfield

iRobot Corporation, a company which designs and builds consumer robots, has agreed to be acquired by Amazon in an all-cash transaction valued at $1.7bn including net debt.

According to a statement announcing the deal, Amazon will pay $61 per share to acquire the company. The agreed price represents a premium of 22 percent to the stock’s last closing price of $49.99. Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals. On completion, Colin Angle will remain as chief executive of iRobot.

“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, senior vice president of Amazon Devices. “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive—from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin. Customers love iRobot products—and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”

“Since we started iRobot, our team has been on a mission to create innovative, practical products that make customers’ lives easier, leading to inventions like the Roomba and iRobot OS,” said Mr Angle. “Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead.”

Amazon has undertaken a significant push toward robotics and connected devices of late. The company is increasing its efforts to transform its Alexa-enabled smart devices from stationary objects into mobile machines. Amazon has its own mobile robot, which is currently only available for purchase via invitation. The company also offers its own flying security drone called the Always Home Cam, which is available through its Ring business.

The quantity of data which Roomba vacuums collect on households will no doubt be extremely valuable to Amazon as it continues to roll out more smart devices. However, the deal has already begun to attract concern from privacy advocates. The iRobot deal comes hot on the heels of Amazon’s $3.9bn deal to acquire the direct primary-care company One Medical, operating as 1Life Healthcare Inc, which itself sparked concerns about data privacy.

Though it is unknown if the iRobot transaction will attract significant regulatory scrutiny, if the deal falls through, Amazon would be required to pay iRobot a $94m termination fee.

News: Alexa! Start my Roomba: Amazon buys robot vacuum maker for $1.7 billion

Consortium to acquire Mediclinic in £3.7bn deal

BY Richard Summerfield

Mediclinic International, a private hospital group based in South Africa, has agreed to be acquired by a consortium comprised of Remgro Ltd and MSC Mediterranean Shipping in deal worth £3.7bn.

Under the terms of the deal, shareholders of Mediclinic will receive 504 pence in cash for each share of Mediclinic, a premium of 23 percent from the day before the final offer was made in early June, the companies said. The deal comes after an earlier offer of £3.4bn was rejected in June by Mediclinic.

Remgro is the investment vehicle of the Rupert family which already owns a 45 percent stake in Mediclinic. The two companies will each own 50 percent of Mediclinic under the terms of the deal.

“The recommended offer represents a near-term value realisation for Mediclinic shareholders at an attractive premium,” said Dame Inga Beale, chair of Mediclinic. “Over 39 years, Mediclinic has developed into the leading international healthcare services group it is today. During this time, Remgro has remained a supportive long-term shareholder. Together with SAS, the consortium’s resources will put Mediclinic in a strong position to continue to serve patients through our broad range of high-quality healthcare services.”

“I am delighted that Remgro is participating in this transaction, which is fully aligned with our strategy of prioritising our ownership of structurally attractive, unlisted assets,” said Jannie Durand, chief executive of Remgro. “Since its founding, Remgro has been a long-standing and supportive shareholder of Mediclinic. We are proud of what the business has achieved over that period and look forward to continuing our support, alongside our partner SAS, as the business transitions to the next phase of its evolution under stable, long-term ownership. Under the stewardship of the Consortium, Mediclinic will be well-positioned to execute on its strategy and undertake the investment required to realise the full potential of the business.”

“We are delighted to be partnering with Remgro on the acquisition of Mediclinic, a business we have great admiration for,” said Diego Aponte, group president of MSC. “MSC is very well placed to provide long-term capital, as well as our insight and experience from operating a global business, in order to support the strategic ambitions of the Mediclinic management team. We believe that, alongside Remgro, our ownership will provide Mediclinic with significant resources to the benefit of all of Mediclinic’s stakeholders, including in particular its patients, employees, doctors and host governments.”

News: Consortium to buy S.Africa hospitals firm Mediclinic for $4.49 bln

Global dealmakers expect activity uptick in 2H22, reveals new survey

BY Fraser Tennant

Global M&A deal activity is expected to increase in the second half of 2022 despite challenging market conditions, according to a new Datasite survey.

In its ‘2H 2022 M&A Outlook’ survey, Datasite reveals that 68 percent of the more than 540 global dealmakers surveyed said they expect global deal volume to rise in the second half of 2022, with 41 percent expecting to see the biggest increase in transformational acquisitions or mergers, followed by debt financing at 37 percent and secondary buyouts at 34 percent.

Additionally, 78 percent of dealmakers are pricing at least a 5 to 7 percent increase in inflation, if not higher, into their financial valuation models for the rest of the year. When asked how inflation is expected to impact M&A deal flow, 46 percent of dealmakers said they expect a greater component of deals to be financed via equity, with an additional 34 percent predicting more straight cash deals.

Drilling down, the Datasite survey states that uncertain valuations, inflation and the Russia-Ukraine war are affecting other aspects of dealmaking, including deal size and the timing of completion. Dealmakers said the war, as well as inflation and the cost of capital, are factors likely to prevent a deal from closing before the end of 2022.

Qualitative feedback from dealmakers also points to uncertainty around valuations as another factor having a significant impact on M&A overall, including pausing larger acquisitions and merger processes, especially among corporate and private equity dealmakers.

“Despite geopolitical uncertainties and overall market volatility, global deal activity itself is still strong,” said Rusty Wiley, chief executive of Datasite. “However, when it comes to valuations, dealmakers will likely adjust multiples downward so the net result may be lower valuations overall in the second half of the year.”

And while valuations are lowering, deal times are lengthening. “The median length of time for a new deal, or asset sale or merger, has increased by 5 percent year-over-year so far this year, while deal preparation time is also rising, up 31 percent, for the same time frame,” added Mr Wiley. “This means many dealmakers are ‘ready to go’ but have not launched their projects just yet.”

Report: 2H 2022 M&A Outlook

Amazon’s healthcare push continues

BY Richard Summerfield

Amazon has agreed to acquire primary care organisation One Medical in a deal valued at around $3.9bn.

Under the terms of the deal, Amazon will acquire One Medical for $18 per share in an all-cash transaction valued at approximately $3.9bn, including One Medical’s net debt. Completion of the transaction is subject to customary closing conditions, including approval by One Medical’s shareholders and regulatory approval. Upon completion, Amir Dan Rubin will remain as chief executive of One Medical.

“We think health care is high on the list of experiences that need reinvention,” said Neil Lindsay, senior vice president of Amazon Health Services. “Booking an appointment, waiting weeks or even months to be seen, taking time off work, driving to a clinic, finding a parking spot, waiting in the waiting room then the exam room for what is too often a rushed few minutes with a doctor, then making another trip to a pharmacy – we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days. We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years.”

He added: “Together with One Medical’s human-centered and technology-powered approach to health care, we believe we can and will help more people get better care, when and how they need it. We look forward to delivering on that long-term mission.”

“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” said Mr Rubin. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers. We look forward to innovating and expanding access to quality healthcare services, together.”

One Medical, whose parent company is San Francisco-based 1Life Healthcare, Inc, is a membership-based service that offers virtual care as well as in-person visits. It also works with more than 8000 companies to provide its health benefits to employees. One Medical has about 767,000 members and 188 medical offices in 25 markets, according to its first-quarter earnings report, which also showed the company had incurred a net loss of $90.9m after pulling in $254.1m in revenue.

Amazon’s interest in healthcare services has been growing for some time. In 2018, the company acquired online pharmacy PillPack for $750m before opening its own online drug store that allows customers to order medication or prescription refills and have them delivered to their front door in a couple of days. And last year, it began offering its Amazon Care telemedicine programme to employers across the US.

News: Amazon strikes $3.5 bln deal for One Medical in long march into U.S. healthcare