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M&A Newsletter MedTech, Pharma and Pharma Services www.pwc.de Information on transactions in the European MedTech, Pharma and Pharma Services industry Edition 6, February 2018 Transaction environment M&A activity in the European MedTech, Pharma and Pharma Services industries increased by over 10% in 2017 compared to the previous year reaching a new high with 230 relevant transactions. The elevated level of deal activity resulted from the vibrant M&A markets in the MedTech and Pharma Services industries, which outweighed a rather dampened M&A activity in the Pharma industry this year. Additional to various industry- specific trends, the current macroeconomic environment continues to drive European M&A deal momentum in these sectors, fostered by the ECB’s ongoing low-interest policy and attractive financing conditions. As a consequence, despite the high level of political and economic uncertainty in connection with the implications of Brexit, the Trump’s administration policies as well as several European elections, the number of billion-euro acquisitions rose from 5 to 13. UK, Germany and France went head to head when it comes to the number of hosted deals, together accounting for 43% of the total M&A deal number in the MedTech, Pharma and Pharma Services industries. Deals MedTech In 2017 we observed over 100 transactions in the European MedTech industry with over €37.8bn cumulated enterprise value. This represents a strong increase in both the number of transactions as well as the deal volume compared to the previous year (82 deals with a total enterprise value of €4.3bn) and the fourth consecutive increase in MedTech deal activity since 2014. 2017 was marked with a number of large-sized MedTech deals. Essilor, the France-based global ophthalmic company, merged with Luxottica, the Italian-based eyewear company (EV €24.0bn). EQT Partners, the Swedish private equity firm, acquired a 20% stake in Otto Bock HealthCare (EV €3.0bn), a German developer, manufacturer and distributor of prosthetics, orthotics and mobility solutions, while PerkinElmer, the US-based provider of solutions in the diagnostics, environmental and laboratory services industry, completed a €1.2bn strategic acquisition of EUROIMMUN Medical Laboratory Diagnostics, a German producer of diagnostics test systems for autoimmune diseases, infectious diseases and allergies. While in 2016 private equity funds participated in 46 transactions, which constituted 56% of all deals, in 2017 only 36 deals (34%), deals were backed by financial sponsors. The overall deal

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Page 1: M&A Newsletter MedTech, Pharma and Pharma Services ...€¦ · M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018 Pharma In 2018 we expect the Pharma industry

M&A Newsletter MedTech, Pharma and Pharma Services

www.pwc.de

Information on transactions in the European MedTech, Pharma and Pharma Services industry

Edition 6, February 2018

Transaction environment

M&A activity in the European MedTech, Pharma and Pharma Services

industries increased by over 10% in 2017 compared to the previous year

reaching a new high with 230 relevant transactions.

The elevated level of deal activity resulted from the vibrant M&A markets in the

MedTech and Pharma Services industries, which outweighed a rather dampened

M&A activity in the Pharma industry this year. Additional to various industry-

specific trends, the current macroeconomic environment continues to drive

European M&A deal momentum in these sectors, fostered by the ECB’s ongoing

low-interest policy and attractive financing conditions. As a consequence,

despite the high level of political and economic uncertainty in connection with

the implications of Brexit, the Trump’s administration policies as well as several

European elections, the number of billion-euro acquisitions rose from 5 to 13.

UK, Germany and France went head to head when it comes to the number of

hosted deals, together accounting for 43% of the total M&A deal number in the

MedTech, Pharma and Pharma Services industries.

Deals

MedTech

In 2017 we observed over 100 transactions in the European MedTech industry with over

€37.8bn cumulated enterprise value. This represents a strong increase in both the number of

transactions as well as the deal volume compared to the previous year (82 deals with a total

enterprise value of €4.3bn) and the fourth consecutive increase in MedTech deal activity since

2014.

2017 was marked with a number of large-sized MedTech deals. Essilor, the France-based global

ophthalmic company, merged with Luxottica, the Italian-based eyewear company (EV

€24.0bn). EQT Partners, the Swedish private equity firm, acquired a 20% stake in Otto Bock

HealthCare (EV €3.0bn), a German developer, manufacturer and distributor of prosthetics,

orthotics and mobility solutions, while PerkinElmer, the US-based provider of solutions in the

diagnostics, environmental and laboratory services industry, completed a €1.2bn strategic

acquisition of EUROIMMUN Medical Laboratory Diagnostics, a German producer of

diagnostics test systems for autoimmune diseases, infectious diseases and allergies.

While in 2016 private equity funds participated in 46 transactions, which constituted 56% of all

deals, in 2017 only 36 deals (34%), deals were backed by financial sponsors. The overall deal

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

volume with private equity participation in 2017, however, increased to €10.7bn, implying that

fewer but larger transactions were conducted in this segment. Prominent examples include the

acquisition of a 19.95% stake in ConvaTec Group, the UK-headquartered provider of solutions

for management of chronic conditions, by Novo A/S, the private equity and venture capital arm

of Novo Nordisk, for €1,170m as well as the acquisition of a 20% stake in Otto Bock HealthCare

GmbH by EQT Partners AB mentioned above.

Accounting for nearly half of all MedTech deals in 2017 and including all top three deals by

size, Germany, UK, and France were the most active geographical MedTech M&A markets with

21, 15 and 15 deals respectively contributing €12.4bn (33%) of €37.8bn total deal value. Last

year top three countries by the number of deals represented only 20% of the total enterprise

value transacted.

(For more information on recent MedTech deals, please refer to page 5)

Pharma

In 2017 the European Pharma M&A market was dominated by three megadeals, which

accounted for 90.1% of the total €39.3bn deal volume. Firstly, Johnson & Johnson acquired

Actelion Pharmaceuticals, a Switzerland-based biopharmaceutical company, for €27.6bn,

ending Johnson & Johnson’s years-long search for a target large enough to accelerate the

sluggish growth in recent years as well as to counter the risk of potential sales losses due to the

patent cliff and the introduction of biosimilar versions of Johnson & Johnson’s best-selling

arthritis drug Remicade by Pfizer and Merck & Co. Secondly, Cinven and Bain Capital, a US-

based private equity consortium, were finally successful in acquiring the required majority of

stocks for the takeover of STADA Arzneimittel, the German manufacturer of generic and

branded pharmaceuticals, for €5.2bn. Thirdly, Novartis acquired Advanced Accelerator

Applications, a France-based radiopharmaceutical company, for €2.9bn, thereby strengthening

own expertise and product portfolio in radiopharmaceuticals and related diagnostics.

However, the total number of deals in 2017, decreased from 65 to 54, representing a 17% drop

compared to the previous year, with the proportion of strategic and financial bidders remaining

approximately the same. A potential explanation for a lower level of European Pharma M&A

activity in 2017 could be the overall reluctance due to uncertainty about the effects of the

upcoming US tax reform and implications of the efforts of Trump’s administration to repeal

Affordable Care Act.

In 2017 the highest M&A activity was observed in the UK (15%), Switzerland (15%) and Russia

(11%), whereby the latter appeared in the list of top countries for the first time since the first

edition of this newsletter. Though 3 of 6 deals in Russia were cross-border, we consider this as

a temporary spike in activity without proper underlying macroeconomic trends. Moreover, the

recent issue brought to attention by international pharmaceutical giants operating in Russia,

relating to state procurement of generic drugs with patented active ingredients, puts into

question the future of foreign investments into the Russian pharmaceutical industry.

(For more information on recent Pharma deals, please refer to page 7)

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

Pharma Services

The European M&A market for Pharma Services was vibrant in 2017 with 70 transactions, an

increase of more than 15 deals compared to 2016. The majority of these deals (69%) were of

strategic nature, indicating the ongoing consolidation phase in the industry. This trend is

reflected in the acquisition of Patheon, the Dutch contract manufacturing and development

company, by Thermo Fisher Scientific, the leading maker of diagnostic and testing equipment

for €6.5bn and Chiltern International Limited, a UK-based contract researcher being acquired

by Laboratory Corporation of America Holdings (“LabCorp”), the US-based provider of clinical

laboratory services and clinical tests, for €1.3bn later in the year.

The proportion of deals with private equity participation remained on a low level (31%),

however, at the same time financial investors more than doubled last year’s €1.1bn deal

volume, reaching €2.4bn in 2017. The level was mainly reached by the acquisition of Cerba

HealthCare, a France-based operator of medical biology laboratories by Partners Group

Holding, a listed Switzerland-based alternative asset management company and private equity

firm, together with Public Sector Pension Investment Board, a Canada-based state-owned

pension investment managing firm, for a total consideration of €1.8bn.

In line with the last year, UK and France remained the countries of choice when it comes to

acquiring a Pharma Services company. The two countries comprise one third of the whole deal

number, hosting 13 and 11 deals respectively with the total enterprise value of €3.6bn. Almost a

half of these deals (45%) were cross-border, which indicates the global character of the

consolidation trend and a strong foreign interest in the services capabilities and technological

know-how in UK and France.

(For more information on recent Pharma Services deals, please refer to page 9)

Outlook 2018

MedTech

M&A activity in the MedTech industry increased again in 2017, as it had been doing since 2014,

and the trend is not expected to stop any time soon in 2018, as the industry still remains rather

fragmented with small players, occupying individual product and geographical niches. With the

pace of internal innovation slowing down, bigger MedTech companies are likely to continue

strategic acquisitions of smaller, but more innovative peers as a way to stay at the forefront of

the industry.

In the era of rapid evolution of information technologies, we observe the emergence of

MedTech companies that focus their business efforts on development of software solutions for

diagnostics, analysis and presentation of medical data utilising modern advancements in big

data analytics and artificial intelligence. As the line between hardware medical devices and

applications is eroding, such companies are likely to be targeted for acquisitions by MedTech

device companies looking for a way to digitalise their product offerings and create an integrated

solution platform.

Furthermore, an increasing cost pressure fuelled by various drivers such as low-cost MedTech

providers and higher negotiation power of clients will further catalyse deal activity in 2018.

Greater interest in MedTech companies is expected from Pharma players, urged to digitalise

their business models and willing to complement drug products with value-add technological

features offering personalised drug-device product combinations.

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Pharma

In 2018 we expect the Pharma industry to remain one of the driving forces in the European

M&A market as leading Pharma companies struggle to realise higher organic growth rates and

are at the same time urged to fuel product pipelines.

The necessity to identify inorganic sources of revenues is driven by the impending expirations

of blockbuster drug patents and subsequent pressure from manufacturers of generics and

biosimilars. As a consequence, we are likely to see higher competition from middle and big

Pharma companies for acquisition of smaller drug pipelines to manage the risk of investing

money in own R&D activities. Especially lucrative are those drugs that cleared Phase I and

Phase II of the clinical research process or those that are intended for treatment of rare

diseases. Furthermore, in 2018 we may see further divestments of excess production capacities

and non-core segments to focus on key therapeutic areas in the urge to increase efficiency and

to free financial resources to be reinvested in higher margin activities.

The expectation of an elevated level of the future M&A activity in the Pharma industry is

further justified by the approval of the US tax reform late in 2017, allowing the allocation of

abundant overseas cash capital held by US pharma industry players. However, the uncertainty

regarding the efforts of the Trump’s administration to revamp healthcare insurance industry

has not come to end. If successful, it may push Americans into purchasing cheaper insurance

plans, thus reducing demand for innovative, but expensive pharmaceutical products.

Pharma Services

We expect M&A activity in the Pharma Services industry to remain at its elevated level in 2018

as there are no signs for the ongoing industry consolidation process to come to a halt. This is

primarily driven by two specific industry trends. First of all, as pharma companies are

continuing to outsource non-core activities, such as production or specific development steps,

they are also striving to reduce the number of external suppliers, thus driving the need for

consolidation. Given that, CROs and CMOs are striving to become one-stop solution platforms

to fulfil the demand of pharma companies and to secure strategic partnerships with high

volumes and long-term commitment.

At the same time, Pharma Services providers need to hold available technological capabilities

and fitting capacities to be able to handle new requests of particularly large pharma companies.

As a result, the leading players and platforms held by private equity investors seek further

complementary assets to close existing gaps in their production network. In addition to

technology considerations, Pharma Services companies benefit from larger-scale operations by

optimising utilisation of their capacities according to the respective volume requests.

Inorganic growth is commonly considered to be more efficient to achieve the objectives above

than organic growth as it saves time and typically brings existing customer relationships to the

buyer. Therefore, we anticipate a high appetite for Pharma Services companies who bring

specific technologies, right scale and/or an attractive customer base to the buyer.

Sources: PwC research (company information, market reports, Mergermarket, press releases)

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MedTech Selected European M&A transactions in the MedTech industry

(01/2017–12/2017)

Transaction volume and value 2017*

Top countries by deal volume Percentage of deals with PE participation

Selected transactions in 2017 in the MedTech industry:

MedTech

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Dec-17

Magnum Capital Industrial Partners

Indiba S.A. ES

Designer and manufacturer of medical and aesthetic equipment

55 2.8x 7.9x

Dec-17 Medtronic Inc.

Crospon Limited

IE

Producer of medical devices for endoscopic diagnostics

38 n.a. n.a.

Oct-17 Ambu A/S invendo medical GmbH

DE Developer of sterile, single use colonoscopies

185 n.a. n.a.

Oct-17 CryoLife Inc. Jotec GmbH DE

Manufacturer of medical devices for aortic and peripheral vascular diseases

192 n.a. n.a.

Oct-17 Stryker Corporation

Vexim SA FR

Developer of invasive medical instruments used in treatment of vertebral fractures

146 8.4x n.a.

Jul-17 Koninklijke Philips N.V.

TomTec Imaging Systems GmbH

DE

Diagnostic medical imaging software solutions for cardiology

n.a. n.a. n.a.

PwC was the exclusive financial advisor on the sale of TomTec Imaging Systems to Koninklijke Philips. For more information please refer to page 12.

9 8 911

6

10

17

3

911

4

9

24.3

0.0

7.7

0.2 0.0

4.60.3

0.00.0 0.5 0.0 0.2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecVolume Value (EUR bn)

19%

14%

14%12%

41%

DE UK FR NL Other

34%

66%

PE Strategic only

* Transaction value refers to those transactions for which data on enterprise values are available

106 deals 106 deals

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

MedTech

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Jul-17 Fortissimo Capital

Tuttnauer Europe B.V.

NL

Manufacturer of autoclave and plasma sterilizers and washer disinfectors

88 1.8x n.a.

Jun-17 Roche Holding AG

mySugr GmbH

AT

Provider of an app-based all-around solution for diabetes management

n.a. n.a. n.a.

Jun-17 EQT Partners AB

Otto Bock HealthCare GmbH (20% Stake)

DE

Developer and manufacturer of prosthetics, orthotics and mobility solutions

3,015 3.4x n.a.

Jun-17 Ahlstrom Capital Oy

Detection Technology Plc (38.77% Stake)

FI Provider of X-ray imaging systems, i.a. for medical imaging

237 3.1x 13.7x

Jun-17 PerkinElmer Inc.

Euroimmun Medical Laboratory Diagnostics

DE

Manufacturer of medical diagnostics devices, software and consumables

1,200 n.a. n.a.

Jun-17 Novanta Inc.

W.O.M. World of Medicine GmbH

DE

Manufacturer of medical devices for minimal invasive surgery

115 1.6x 10.0x

Apr-17 Hamilton Thorne Inc.

Gynemed GmbH & Co. KG

DE

Manufacturer of surgery and conservative gynaecology products

14 1.6x 5.3x

Apr-17 Bio Telemetry Inc.

LifeWatch AG

CH Provider of remote cardiac monitoring solutions

234 2.2x n.a.

Mar-17 Boston Scientific Corporation

Symetis SA CH Developer of heart valve replacement devices and systems

405 n.a. n.a.

Mar-17 Novo A/S

ConvaTec Group PLC (19.95% Stake)

UK

Developer of medical products and technologies against chronic diseases

7,254 4.7x 23.4x

Mar-17

Shanghai Fosun Pharma. Co. Ltd.

Breas Medical AB (80% Stake)

SE Manufacturer of respiratory support medical devices

n.a. n.a. n.a.

Mar-17 GE Healthcare Ltd.

Monica Healthcare Limited

UK

Manufacturer of early-stage wireless maternal-fetal monitoring devices

n.a. n.a. n.a.

Jan-17 AEVIS VICTORIA SA

LifeWatch AG (88.01% Stake)

CH Provider of remote cardiac monitoring solutions

211 2.0x n.a.

Jan-17 Essilor International SA

Luxottica Group S.p.A.

IT

Designer and manufacturer of fashion, luxury and sports eyewear

23,965 2.6x 12.9x

Average 3.1x 12.2x

Median

2.6x 11.4x

Sources: PwC research (Capital IQ, company information, Mergermarket, press releases)

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Pharma Selected European M&A transactions within the Pharma industry

(01/2017–12/2017)

Transaction volume and value 2017*

Top countries by deal volume Percentage of deals with PE participation

Selected transactions in 2017 in the Pharma industry:

Pharma

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Dec-17

Hefei SARI V-Capital Management Co. Ltd

Nerviano Medical Sciences SRL (90% Stake)

IT

Pharmaceutical research and development company

n.a. n.a. n.a.

Dec-17 Novartis AG

Advanced Accelerator Applications SA

FR Developer of molecular nuclear medicine diagnostic

2,921 26.7x n.a.

Nov-17 EMS S.A. Galenika a.d. (93.7% Stake)

RS Manufacturer of generic drugs

42 n.a. n.a.

Oct-17 Investor consortium

ADC Therapeutics SA

CH Developer of proprietary antibody drug conjugates

170 n.a. n.a.

Sep-17 Derma-pharm AG

RIEMSER Pharma GmbH (unit only)

DE Hyperthermic medical devices business unit

n.a. n.a. n.a.

Sep-17 Clinigen Group Plc

Quantum Pharma Plc

UK

Developer of niche medicines and provider of services to the healthcare sector

167 1.7x 48.4x

Aug-17 Karo Pharma AB

Weifa ASA NO

Manufacturer of non-prescription, OTC pharmaceutical products

168 3.8x 19.0x

3

12

7

9

3

54

7

5

3

5

27.8

0.00.0

2.70.0 0.0

5.3

0.2 0.3 0.0 0.02.9

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecVolume Value (EUR bn)

15%

15%

11%

9%

50%

UK CH RU NL Other

48%52%

PE Strategic only

* Transaction value refers to those transactions for which data on enterprise values are available

54 deals 54 deals

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Pharma

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Aug-17

Investor consortium led by SoftBank

Roivant Sciences, Inc.

CH

Late-stage clinical development of nonstrategic drug candidates

n.a. n.a. n.a.

Jul-17 Emergent BioSolutions Inc.

Sanofi SA (unit only)

FR FDA-approved ACAM2000 smallpox vaccine business unit

85 n.a. n.a.

Jul-17 Alvogen Inc. Bittner Pharma OOO

RU

Manufacturer of medicinal balm and homeopathic products

29 1.0x n.a.

Jul-17

Investor consortium of Cinven and Bain

STADA Arzneimittel AG

DE

Developer of APIs and manufacturer of generic pharmaceuticals

5,191 2.4x 13.0x

May-17 Chiesi Farmaceutici S.p.A.

Horizon Pharma plc (European subsidiaries)

NL

NL, FR and DE-based subsidiaries focused on respiratory diseases

n.a. n.a. n.a.

Apr-17 Cathay Fortune Corp

Epigenomics AG

DE

Developer of blood-based tests for screening and diagnosis of cancer

159 37.9x n.a.

Apr-17 Fresenius Kabi AG

Merck KGaA (unit only)

CH Biosimilar business unit

170 n.a. n.a.

Apr-17 Creat Group Corporation

Biotest AG DE

Provider of bio therapeutic drugs and plasma protein products

1,203 2.2x 13.9x

Apr-17

Shareholders of Actelion Pharma-ceuticals Ltd

Idorsia Ltd CH

Firm specialising in discovery and development of small molecules

694 n.a. n.a.

Apr-17 Astellas Pharma Inc.

Ogeda SA BE

Clinical-stage drug discovery company developing small molecule drugs

500 n.a. n.a.

Jan-17 Piramal Enterprises Limited

Mallinckrodt Plc (unit only)

IE Intrathecal therapy business unit

160 3.8x n.a.

Jan-17 Johnson & Johnson

Actelion Pharma-ceuticals Ltd

CH

Developer of pharmaceuticals for the treatment of unmet medical needs

27,591 12.2x 27.4x

Jan-17 Agile Pharma B.V

Generis Farma-ceutica S.A.

PT Manufacturer of generic pharmaceuticals

135 n.a. n.a.

Average 10.2x 24.3x

Median

3.8x 19.0x

Sources: PwC research (Capital IQ, company information, Mergermarket, press releases)

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Pharma Services Selected European M&A transactions within the Pharma Services industry

(01/2017–12/2017) Transaction volume and value 2017*

Top countries by deal volume Percentage of deals with PE participation

Selected transactions in 2017 in the Pharma Services industry:

Pharma Services

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Nov-17

Almac Sciences Group Limited

Bioclin Research Laboratories Limited

IE

Provider of analytical services and rapid reporting for drug development

n.a. n.a. n.a.

Oct-17

Avara Pharma-ceutical Services Inc.

AstraZeneca Plc (facility in Reims)

FR

Pharmaceutical manufacturing and distribution facility of AstraZeneca Plc

n.a. n.a. n.a.

Sep-17 Ergomed plc PSR Group B.V.

NL

CRO specialising in the development of drugs for orphan diseases

6 1.2x 16.8x

Sep-17 Recipharm AB

Roche Holding AG (facility in Leganes)

ES

Solid dose pharmaceuticals manufacturing facility of Roche Holding AG

n.a. n.a. n.a.

Aug-17 Immuno- Precise Antibodies

U-Protein Express BV

NL

CRO engaged in production of proteins and antibodies

7 4.1x n.a.

Jul-17

Laboratory Corporation of America Holdings

Chiltern International Limited

UK Contract research organisation

1,344 3.2x 24.7x

Jul-17

Avara Pharma-ceutical Services Inc.

Pfizer Italia Srl (facility in Liscate)

IT Sterile manufacturing facility of Pfizer Italia Srl

n.a. n.a. n.a.

6

8

3

7

9

7

9

7

3

6

32

2.0

0.4 0.3 0.1

6.5

0.41.5

0.0 0.0 0.1 0.0 0.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecVolume Value (EUR bn)

19%

16%

10%10%

46%

FR UK IT DE Other

31%

69%

PE Strategic only

* Transaction value refers to those transactions for which data on enterprise values are available

70 deals 70 deals

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Pharma Services

Date Acquirer Target Country Target description EV

(EURm) EV/

Revenues EV/

EBITDA

Jul-17 TPI Enterprises Limited

Vistin Pharma ASA (unit only)

NO Opioids and tablet manufacturing business

17 1.5x n.a.

Jul-17 Eurofins Scientific SE

Amatsigroup SAS

FR CDMO that provides preclinical and clinical phase services

130 n.a. n.a.

Jun-17 CapVest Partners LLP

NextPharma Technologies Limited

UK

Provider of pharma contract manufacturing and distribution services

n.a. n.a. n.a.

Jun-17

Zhejiang Xianju Pharma. Co. Ltd.

Newchem S.P.A.; Effe-chem S.r.l.

IT

API CMO with focus in fields of steroids, progestogens and prostaglandins

n.a. n.a. n.a.

Jun-17 Novacap SAS PCAS SA FR

Developer of complex molecules for life sciences and specialty chemicals markets

305 1.6x 11.2x

May-17 Investor consortium

Minafin Group (minority stake)

BE Manufacturer of APIs, organic intermediates and fine chemicals

n.a. n.a. n.a.

May-17 Lonza Group Limited

PharmaCell B.V.

NL CMO focusing on cell therapy and regenerative medicine

n.a. n.a. n.a.

May-17 ABA Chemicals Corporation

Amino Chemicals Limited

MT Manufacturer of APIs and provider of CMO services

19 1.4x 5.8x

May-17

Thermo Fisher Scientific Inc.

Patheon N.V. NL

Contract manufacturing and development organisation

6,481 3.8x 22.8x

Apr-17 Mitsui & Co. Ltd.

CJSC R-Pharm (10% stake)

RU Manufacturer of APIs and finished dosage forms

n.a. n.a. n.a.

Feb-17

Lianhe Chemical Technology Co. Ltd.

Fine Industries Limited

UK

Manufacturer of fine chemicals and active pharmaceutical ingredients

n.a. n.a. n.a.

PwC was the exclusive financial advisor on the sale of Fine Industries to Lianhe Chemical Technology. For more information please refer to page 13.

Jan-17 Sonic Healthcare Limited

Medi-zinisches Labor Bremen GbR

DE

Provider of laboratory testing services in the areas of drug monitoring

63 2.1x n.a.

Jan-17 Investor consortium

Cerba HealthCare SAS

FR Provider of medical biology testing services

1,800 2.9x n.a.

Average 2.4x 16.3x

Median

2.1x 16.8x

Sources: PwC research (Capital IQ, company information, Mergermarket, press releases)

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

Public comparables Multiples of European listed MedTech, Pharma and Pharma Services companies (sorted by market cap)

Multiples of European public companies

Company EBITDA

margin1) Market

Cap2) EV2)

EV/Revenues EV/EBITDA

LTM3) 2018E1) LTM3) 2018E1)

MedTech

Medtronic 31% 91,021 104,065 4.2x 4.3x 13.6x 13.8x

Essilor 20% 24,645 27,322 3.7x 3.8x 15.8x 14.9x

Coloplast 36% 14,069 14,180 6.8x 6.4x 18.7x 18.4x

Smith & Nephew 29% 12,677 14,063 3.5x 3.4x 12.4x 11.8x

bioMérieux 21% 8,839 9,121 4.1x 3.8x 19.5x 18.2x

Sonova 22% 8,496 8,912 4.0x 3.8x 18.7x 16.5x

William Demant 22% 6,035 6,694 3.9x 3.6x 17.9x 16.5x

DiaSorin 39% 4,052 3,939 6.3x 5.6x 16.4x 14.6x

Getinge 22% 3,298 4,827 1.6x 2.2x 8.6x 10.8x

Elekta 17% 2,633 2,830 2.4x 2.5x 14.4x 12.5x

Average 4.1x 3.9x 15.6x 14.8x

Median 4.0x 3.8x 16.1x 14.7x

Pharma

Roche 39% 179,694 193,916 4.2x 4.1x 10.6x 10.4x

Novartis 29% 163,877 181,117 4.4x 4.3x 13.9x 13.7x

Sanofi 28% 90,016 97,727 2.7x 2.8x 9.4x 9.1x

Bayer 24% 85,899 90,453 1.9x 2.5x 8.2x 9.3x

AstraZeneca 28% 72,976 85,045 4.5x 4.6x 17.2x 16.1x

GlaxoSmithKline 34% 72,866 92,840 2.7x 2.7x 9.3x 8.1x

Allergan 46% 45,308 70,157 5.4x 5.6x 13.0x 11.5x

Shire 42% 39,617 56,724 4.6x 4.5x 11.0x 10.4x

Merck 29% 39,021 49,563 3.2x 3.2x 11.1x 11.3x

Mylan 26% 18,902 30,523 3.1x 3.0x 9.7x 8.8x

Average 3.7x 3.7x 11.3x 10.9x

Median 3.7x 3.6x 10.8x 10.4x

Pharma Services

Fresenius Medical Care 17% 26,926 34,863 2.1x 1.9x 11.3x 10.3x

Lonza 18% 16,727 15,470 4.1x 3.0x 19.0x 11.6x

Steris 22% 6,196 7,162 3.3x 3.4x 15.7x 13.9x

ICON 23% 5,058 5,105 3.5x 2.7x 15.4x 13.9x

Orion 31% 4,406 4,424 4.1x 4.2x 13.8x 13.7x

Dechra Pharmaceuticals 23% 2,205 2,341 5.8x 5.1x 26.8x 19.2x

Mallinckrodt 39% 1,785 6,334 2.4x 2.9x 11.6x 6.9x

Bachem 28% 1,783 1,847 8.9x 7.1x 32.4x 23.3x

Siegfried 14% 1,087 1,147 1.9x 1.6x 13.6x 9.6x

Recipharm 13% 630 993 1.8x 1.8x 13.2x 11.6x

Average 3.8x 3.4x 17.3x 13.4x

Median 3.4x 2.9x 14.6x 12.7x

1) At fiscal year end 2) In EURm 3) Last twelve months; Source: Capital IQ, as of 31/12/2017

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

PwC M&A is your preferred M&A advisor for European mid-cap transactions

PwC M&A acted as exclusive financial advisor of TOMTEC on its sale to the Netherlands-based health technology conglomerate Philips

Transaction summary:

TOMTEC has successfully extended its business from an

ultrasound modality OEM supplier to a healthcare IT software

suite for cardiovascular image analytics.

PwC advised TOMTEC’s shareholders and management

throughout the whole process.

Aside from the overall process coordination, PwC M&A supported

the client especially during the process preparation phase. The PwC

team was sparring partner for TOMTEC’s business plan and

advised the management team.

PwC M&A acted as the exclusive financial advisor to the shareholders of Sterinova on the sale to B Braun

Transaction summary:

Founded in 2012 and based in St-Hyacinthe, Quebec, Sterinova

develops, manufactures and distributes ready-to-use sterile

injectable and premix intravenous bags. The company meets the

rigorous standards required by the guidelines of Good

Manufacturing Practices (GMP).

PwC acted as exclusive financial advisor to the founders of

Sterinova, running a highly focused international sell-side process

to secure the best solution for the business.

The addition of Sterinova complements B. Braun’s product offering

in the area of ready-to-use products especially prefilled syringes

and premix bags to the medical specialists’ community via one

existing product and a compelling product pipeline. It also

provides a significant increase on the group’s global manufacturing

capacity in the ready-to-use sterile manufacturing market.

2017

The shareholders

2017

have sold

to

Vendor advised by

The shareholders

to

have sold a majority stake in

Vendor advised by

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

PwC M&A acted as the exclusive financial advisor to NorthEdge Capital on the sale of Fine Industries to Lianhe Technology Company

Transaction summary:

UK-based Fine Industries Group is a leading European contract

manufacturer of products and solutions used in agrochemical and

life sciences. It operates an FDA inspected and approved

manufacturing site at Seal Sands, Middlesbrough.

PwC acted as exclusive financial advisor to NorthEdge Capital,

bringing expert tactical advice in management of a bilateral process

under strict timetable, thereby delivering strategic value.

Fine Industries will become Lianhetech’s European base, allowing

the organisation to operate in closer proximity to its customers and

markets in crop protection, pharma and performance chemicals.

The transaction also extends the business’ portfolio of product

development services and manufacturing solutions.

to

2017

has sold

Vendor advised by

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M&A Newsletter MedTech, Pharma and Pharma Services Edition 6, February 2018

Your PwC MedTech and Pharma team

Please contact our M&A MedTech and Pharma team for any questions, suggestions or comments on the newsletter. We look forward to receiving your feedback.

Alexander von Friesen

+49 69 9585 5487

[email protected]

Alexander Wenzel

+49 69 9585 3466

[email protected]

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