blue book do - crosstree capital partners labs provide testing to determine the ... toxicology...

INDUSTRYBlue Book

CROSSTREEC A P I T A L P A R T N E R S

4Q16Segment: Laboratory

Drug & Device O u t s o u rc i n g

Do

Introduction

Crosstree Capital Partners provides mergers and acquisitions and financing advisory services exclusively to middle-market businesses operating within three health care industry groups – Diagnostics & Tools, Drug & Device Outsourcing, and Healthcare Providers. Having spent more than a decade building the market intelligence, relationships and experience necessary to get our clients the best deal possible, we have advised clients on five continents and consistently lead the market each year in closing successful transactions. Our firm has relationships with nearly every active institutional investor and most active buyers in the market, and we also foster relationships with innovative, emerging private companies in the industry. Using our proprietary integrated information systems, we produce these quarterly Blue Books as a means of sharing a portion of the market intelligence that we gather and maintain. We hope that you find them to be valuable resources.

www.crosstreecapital.com

4Q16 Blue Book

Drug & Device Outsourcing

Laboratory

Logistics

Sales & Communication

TechnologyDiscovery

Development

CDMO

Analytical

Bioanalytical

Central

Core

Toxicology

Laboratory Industry Segment

www.crosstreecapital.com 2

4Q16 Blue Book

Laboratory

Sub-segment Definitions

Segment and Sub-segment Definitions

AnalyticalAnalytical laboratories provide lab services throughout the

CDMO cycle by ensuring the safety, purity and efficacy of a

pharmaceutical product. Analytical labs also test the stability,

shelf life, and storage characteristics of the drug candidate

during the primary manufacturing stage of the CDMO cycle.

BioanalyticalBioanalytical labs assess the biological effects of a drug

compound within a target organism throughout the drug

development process. These labs use assays designed to

measure biological activity during a study. Furthermore,

Bioanalytical labs evaluate the presence of a biological fluid in

a disease-associated protein or biomarker using enzymelinked

immunosorbent assays (“ELISA“).

CentralCentral laboratories provide analytical laboratory services

throughout the drug development process through blood and

tissue analysis. A central or core laboratory’s main function is

to gather and evaluate data used to determine the efficacy of

a drug candidate.

CoreCore labs provide diagnostic services supplemental to the

central labs through traditional (core) and cardiovascular

(ECG) imaging. These labs collect, compare and analyze the

pathological influences of a drug candidate.

ToxicologyToxicology labs provide testing to determine the toxicology

of a substance on animals and cells to prepare parameters for

Phase I human subject clinical studies. Companies providing

toxicology services typically manage animal vivariums

containing models that can range from rodent to non-human

primate.

Laboratory covers all lab services related to the development of a drug. Such labs analyze specimens and images from subjects

and animal models participating in pre-clinical and clinical studies to analyze the effects and results of the drug candidate

being tested. Included in the segment are central and core laboratories, bioanalytical laboratories, analytical laboratories, and

toxicology laboratories.


4Q16 Blue Book

Index Constitutuents

Laboratory

50

100

150

200

250

300

350

400

Public Equity Index

• Charles River Laboratories International, Inc. (NYSE:CRL)• CMIC HOLDINGS Co., Ltd. (TSE:2309)• Crown Bioscience International (GTSM:6554)• EirGenix Inc. (GTSM:6589)• Eurofins Scientific SE (ENXTPA:ERF)

• hVIVO plc (AIM:HVO)• Medpace Holdings, Inc. (NasdaqGS:MEDP)• Oxford BioDynamics Limited (AIM:OBD)• PhoenixBio Co., Ltd. (TSE:6190)• PRA Health Sciences, Inc. (NasdaqGS:PRAH)

• PT Prodia Widyahusada Tbk (JKSE:PRDA)• Shin Nippon Biomedical Laboratories, Ltd. (TSE:2395)• Suven Life Sciences Limited (BSE:530239)• Syngene International Limited (BSE:539268)

Date Price Date Index Value % Change Qtr/Qtr12/31/2014 12/31/2014 207.1 -

03/31/2015 03/31/2015 231.1 11.6%

06/30/2015 06/30/2015 243.0 5.1%

09/30/2015 09/30/2015 243.5 0.2%

12/31/2015 12/31/2015 286.7 17.7%

03/31/2016 03/31/2016 273.4 -4.6%

06/30/2016 06/30/2016 282.5 3.3%

09/30/2016 09/30/2016 338.2 19.7%

12/31/2016 12/30/2016 331.0 -2.1%Source: Crosstree Capital Partners, Inc.

Crosstree Capital Partners Laboratory Index Statistics

Crosstree Capital Partners Laboratory Index

The following value-weighted equity index, updated through the end of 4Q16, is the Crosstree Capital Partners Laboratory

Index, composed of the stocks of companies that operate within the industry sub-segments comprising Analytical,

Bioanalytical, Central, Core, and Toxicology. To be included in the index, constituents must maintain a market capitalization of at

least $50 million, generate at least 30% of their revenue from Laboratory activities and derive at least 50% their customer base

from the Pharmaceutical, Biotechnology or Medical Device industries.


4Q16 Blue Book

LaboratoryPublic Equity Valuation Metrics

Laboratory Valuation Multiples, 4Q161,2

The following table presents valuation statistics, as multiples of revenue, EBITDA and tangible book value, of the publicly traded

companies that compose the Crosstree Capital Partners Laboratory Index, as of the end of 4Q16. Enterprise value equals equity

market value (market capitalization), plus net debt, plus preferred stock, minus cash and cash equivalents.

Company Name EV/LTM Revenue EV/LTM EBITDA Price/Tangible BV

Charles River Laboratories International, Inc. (NYSE:CRL) 3.0x 13.3x NM

CMIC HOLDINGS Co., Ltd. (TSE:2309) 0.6x 5.3x 1.3x

Crown Bioscience International (GTSM:6554) 3.6x 23.7x NM

EirGenix Inc. (GTSM:6589) 16.5x NM 3.0x

Eurofins Scientific SE (ENXTPA:ERF) 3.2x 17.3x NM

hVIVO plc (AIM:HVO) 6.7x NM 2.5x

Medpace Holdings, Inc. (NasdaqGS:MEDP) 4.5x 16.2x NM

Oxford BioDynamics Limited (AIM:OBD) NM NM 4.1x

PhoenixBio Co., Ltd. (TSE:6190) 3.2x 18.6x 2.7x

PRA Health Sciences, Inc. (NasdaqGS:PRAH) 2.7x 15.5x NM

PT Prodia Widyahusada Tbk (JKSE:PRDA) 4.3x 41.9x NM

Shin Nippon Biomedical Laboratories, Ltd. (TSE:2395) 2.4x NM 1.0x

Suven Life Sciences Limited (BSE:530239) 4.0x 19.6x 3.6x

Syngene International Limited (BSE:539268) 9.1x 25.2x 9.2x

Mean 4.9x 19.7x 3.4xMedian 3.6x 18.0x 2.9x

Source: Crosstree Capital Partners, Inc. 1NM - Not Meaningful2Multiples calculated on data available at the close of the quarter


4Q16 Blue Book

Laboratory

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

20.0x

Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2015 2016

Public Equity Valuation Metrics

Laboratory Historical EBITDA Multiples

The following graph presents the median enterprise value to EBITDA multiple of the companies in the Crosstree Capital Partners

Laboratory Index for each of the trailing eight quarters.


4Q16 Blue Book

LaboratoryPrivate Placements

Laboratory Private Equity Placements, 4Q16

The following table presents selected data on disclosed private equity placements that occurred during 4Q16 and involved

target companies operating within the Laboratory industry segment, providing details on the investor type, the transaction

date, status and size (where available), and the industry sub-segment and geographic region of the target.

Date Closed Status1 Target Target

Geography Industry Sub-segment Investor Type Size ($mm)

12/27/2016 C Quantitative Imaging Biomarkers in Medicine

Europe Developed

Core Institutional Investors 0.6

12/26/2016 C AnaBios Corporation, Inc.

North America

Bioanalytical Institutional Investors 4.2

12/19/2016 C Joy Orient Translational Medicine Research Center Co., Ltd.

Asia/Pacific Emerging


12/07/2016 C Grandomics Biosciences Co., Ltd.



12/05/2016 C Metabolon, Inc. North America

Bioanalytical Institutional Investors 30.0

11/30/2016 C Beijing Novogene Technology Co. Ltd.



11/16/2016 C Paradigm Diagnostics, Inc.

North America

Core Institutional Investors -

10/31/2016 C Proteome Sciences plc Europe Developed

Bioanalytical Undisclosed Investors 2.9

10/24/2016 C Rubicon Research Private Limited


Analytical Institutional Investors 32.9

Source: Crosstree Capital Partners, Inc. 1C - complete; P - pending


4Q16 Blue Book

Laboratory

78%

20%2%

Asia/Paci�c Emerging

North America

Various

45%

33%

22%


North America

Europe Developed

60%21%

19%

Core

Bioanalytical

Analytical

56%33%

11%Core

Bioanalytical

Analytical

Private Placement Value by RegionPrivate Placement Volume by Region

Private Placement Value by Sub-segmentPrivate Placement Volume by Sub-segment

Private Placement Metrics

The following graphs summarize 4Q16 disclosed private equity placement volume and placement value by geographic region,

as a percentage of the Laboratory industry segment placement volume and placement value totals.

The following graphs summarize 4Q16 disclosed private equity placement volume and placement value by sub-segment, as a

percentage of the Laboratory industry segment placement volume and placement value totals.


4Q16 Blue Book

Laboratory

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

-

100

200

300

400

500

600

Qtr1 Qtr2 Qtr3 Qtr4

2016

Volum

eV

alue

($m

m)

Value Volume

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

-

50

100

150

200

250

300

Volum

eV

alue

($m

m)

Value Volume

Private Placement Metrics

Laboratory Private Placement Value and Volume by Quarter

The following graph summarizes total quarterly disclosed private equity placement value and placement volume for the

Laboratory industry segment over the trailing four quarters.

Laboratory Private Placement Value and Volume by Month

The following graph summarizes total monthly disclosed private equity placement value and placement volume for the

Laboratory industry segment over the trailing 12 months.


4Q16 Blue Book

LaboratoryMergers & Acquisitions

Laboratory M&A Transactions, 4Q16

The following table presents selected data on disclosed M&A transactions that were announced during 4Q16 and involved

target companies operating within the Laboratory industry segment, providing details on the identity of the buyer, the

transaction date, status and size (where available), and the industry sub-segment and geographic region of the target.

Date Announced Status1 Target Target

Geography Industry Sub-segment Buyer Size ($mm)

12/26/2016 P Shanghai Find Bio-Tech Co., Ltd. (minority stake)


Core Sanpower Group Nanjing Investment Management Co. Ltd.

-

12/21/2016 P Yourgene Bioscience Co., Ltd.


Core Premaitha Health PLC 10.5

12/19/2016 P CMC Biologics A/S Europe Developed

Analytical Asahi Glass Co. Ltd. 514.3

12/15/2016 P Capsugel, Inc. North America

Analytical Lonza Group AG 5,500.0

12/09/2016 C Biopremier - Inovação e Serviços em Biotecnologia, S.A. (majority stake)

Europe Developed

Core SGS SA -

11/30/2016 C The Translational Genomics Research Institute

North America

Core City Of Hope -

11/21/2016 C Reading Clinical Research Ltd

Europe Developed

Bioanalytical Cutest Systems Ltd -

11/18/2016 C Pharmaprogress s.r.l. Europe Developed

Analytical KYMOS PHARMA SERVICES, S .L.

-

11/03/2016 C Averica Discovery Services Inc.

North America

Analytical Neopharm Laboratories -

11/02/2016 C Vivo Biosciences Inc. North America

Bioanalytical LifeNet Health, Inc. -

10/26/2016 P Cyprotex plc Europe Developed

Toxicology Evotec AG 86.4

10/19/2016 C Floragenex, Inc. North America

Core Sedia Biosciences Corporation

-

10/12/2016 P Transgenomic Inc. North America

Bioanalytical Precipio Diagnostics, LLC

-

10/11/2016 P Irvine Pharmaceutical Services, Inc.

North America

Analytical NITTO DENKO Avecia Inc.

-


4Q16 Blue Book

Laboratory

98%

2%Analytical

All Others

37%

31%

19%

13%

Analytical

Core

Bioanalytical

Toxicology

M&A Transaction Value by Sub-segmentM&A Transaction Volume by Sub-segment

Mergers & Acquisitions

The following graphs summarize 4Q16 disclosed M&A transaction volume and transaction value by sub-segment, as a

percentage of the Laboratory industry segment transaction volume and transaction value totals.

Laboratory M&A Transactions, 4Q16 (Continued)Date Announced Status1 Target Target

Geography Industry Sub-segment Buyer Size ($mm)

10/10/2016 P Chemon Co., LTD. Asia/Pacific Developed

Toxicology Ebest Special Purpose Acquisition 2 Co., Ltd.

-

10/06/2016 C ProPharma Group, Inc. North America

Analytical Linden Capital Partners -

Source: Crosstree Capital Partners, Inc. 1C - complete; P - pending


4Q16 Blue Book

Laboratory

-

2.0

4.0

6.0

8.0

10.0

12.0

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Volum

eV

alue

($m

m)

Value Volume

90%

10%0.2%

North America

Europe Developed

Various

50%

31%

13%

6%

North America

Europe Developed


Asia/Paci�c Developed

M&A Transaction Value by RegionM&A Transaction Volume by Region

Mergers & Acquisitions Metrics

Laboratory M&A Transaction Value and Volume by Month

The following graph summarizes total monthly disclosed M&A transaction value and transaction volume for the Laboratory

industry segment over the trailing 12 months.

The following graphs summarize 4Q16 disclosed M&A transaction volume and transaction value by geographic region, as a

percentage of the Laboratory industry segment transaction volume and transaction value totals.


4Q16 Blue Book

Laboratory

- 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

Qtr1 Qtr2 Qtr3 Qtr4

2016

Volum

eV

alue

($m

m)

Value Volume

Mergers & Acquisitions Metrics

Laboratory M&A Transaction Value and Volume by Quarter

The following graph summarizes total quarterly disclosed M&A transaction value and transaction volume for the Laboratory

industry segment over the trailing four quarters.


4Q16 Blue Book

Call us to schedule a confidential appointment

LaboratoryUpcoming Conferences

Conference Dates Location

TOXEXPO 2017 March 12-16, 2017 Baltimore, MD

DIA 29th Annual EuroMeeting March 19-21, 2017 Glasgow, Scotland

Interphex 2017 March 21-23, 2017 New York, NY

ACS National Meeting & Exposition, 253rd April 2-6, 2017 San Francisco, CA

Parenteral Drug Association 2017 April 3-5, 2017 Anaheim, CA

EB 2017 April 22-26, 2017 Chicago, IL

AAPS BIO 2017 May 1-3, 2017 San Diego, CA

Pharma ChemOutsourcing 2017 May 1-3, 2017 Long Branch, NJ

Executive War College 2017 May 2-3, 2017 New Orleans, LA

informEx 2017 May 16-18, 2017 Philadelphia, PA

Outsourcing Clinical Trials - Europe 2017 May 16-17, 2017 Barcelona, Spain

Bio-IT World Conference & Expo, 2017 May 23-25, 2017 Boston, MA

Outsourcing Clinical Trials East Coast 2017 May 23-24, 2017 King of Prussia, PA

Crosstree Capital Partners’ Drug & Device Outsourcing Conference Schedule

Our bankers attend the major global Drug & Device Outsourcing industry conferences. The following table contains a

chronological listing of upcoming Drug & Device Outsourcing conferences that our bankers will be attending, covering the

Discovery, Development, CDMO, Laboratory, Logistics, Sales & Communication, and Technology segments.


Shane C. Senior, CFAHead of Drug & Device Outsourcing

[email protected]


4Q16 Blue Book

Call us to schedule a confidential appointment

Crosstree has a dedicated and exclusive focus on the Diagnostics & Tools, Drug & Device Outsourcing, and Healthcare Providers

industries. Since inception, the firm has been a consistent leader within our focus areas, closing more than 50 successful

transactions worth more than a billion dollars in transaction value, with companies ranging from private equity-backed

consolidators to Fortune 50 publicly-traded companies. In the process, we have represented clients on five continents, and

more than 40% of our transactions have been cross-border. Ten of our recent deals are highlighted below.

LaboratoryRecent Crosstree Transactions

Acquired by

June 2014

Merged with

July 2014September 2014

Received a strategic investment fromAcquired by

May 2015

Acquired by

July 2015

®

Acquired by

July 2015

Acquired by

November 2015

Acquired by

June 2016

Acquired by

December 2016

ProPhasePrecision. Innovation. Impact.

Acquired the OligoManufacturing Business of

February 2017



[email protected]


4Q16 Blue Book

To download or subscribe, visit www.crosstreecapital.com/publications/

Each quarter Crosstree publishes Industry Blue Books for each of our three industries - Diagnostics & Tools, Drug & Device

Outsourcing, and Healthcare Providers – along with separate Blue Books for each of the four to seven segments composing

each industry, for a combined total of 18 quarterly Blue Books. In addition, we publish weekly Industry Blue Sheets, concise

summary pieces covering the latest two weeks of private placement and M&A transactions for each of our three industries. All

of these publications are available for download or subscription on our website.

Diagnostics & Tools

Dt

Industry Overview

Diagnostics & Tools

Dt

Diagnostic ServicesDiagnostics & Tools

Dt

Diagnostics & Tools

Dt

In Vitro Diagnostics

Diagnostics & Tools

Dt

In Vivo Diagnostics

Diagnostics & Tools

Dt

Life Sciences Tools

Do

Industry Overview

DoDrug & Device Outsourcing

Discovery


Development


CDMO


Laboratory



Industry OverviewLogistics


Industry OverviewSales &Communication


Technology

HpHealthcare Providers


Industry Overview


Hospitals &Health Systems


ResidentialCare Facilities


Medical Practices


Ancillary Services

Laboratory

Crosstree Capital Partners’ Quarterly Industry Blue Books

Crosstree Capital Partners’ Weekly Industry Blue Sheets

Crosstree Publications


4Q16 Blue Book

Please contact us for more information

Laboratory

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Industry Blue Book, 4Q16



[email protected]


Although the information in this sales literature has been obtained from or is based upon data from sources Crosstree Capital Partners, Inc. believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This sales literature is for informational purposes only and is not intended as an offer or solicitation of the purchase or sale of a security. All securities transactions are offered by and conducted through Crosstree Capital Securities, LLC, a broker-dealer registered with the SEC, a member of FINRA (www.finra.org) and SIPC (www.sipc.org), and an affiliate of Crosstree Capital Partners.

© 2016 Crosstree Capital Partners, Inc. All rights reserved.



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