Topic: Pharmaceuticals and life sciences

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Health Canada changes cannabis licensing process

On May 8, 2019, Health Canada announced that it is introducing changes to its cannabis licensing process, effective immediately. Before the change, an applicant can apply for a cannabis license by submitting paper application to Health Canada without having to build a facility first. Now, a new applicant for licence to cultivate, process or sell cannabis for medical purposes must have fully built a cannabis facility that meets all the regulatory requirements under the Cannabis Regulations at the time of submitting an application.

This change came about after Health Canada reviewed its existing licensing regime, which revealed that a major … Continue Reading

Building the health systems of tomorrow: dealmaking and the future of the life sciences sector

EY has recently published a year-in-review report for deal making in the global life sciences industry.  The publication features some interesting statistics about deal activity in the past year, and makes predictions about which trends will carry forward into the 2019 and beyond.

The total value of life sciences deals in 2018 was US $198 billion, which was less than anticipated given that the companies in this space have “total firepower” (i.e., a measure of a company’s capacity to engage in M&A) of over US $1 trillion. According to the results of an executive survey, respondents suggested that high valuations … Continue Reading

Dissecting MedTech M&A deals

As we previously reported, this year has seen a surge in healthcare-related M&A. Many of these transactions are in the medical technology industry, or MedTech. While the industry’s healthy profit margins and opportunities for growth have driven a flurry of activity, the potential for large rewards from MedTech acquisitions also comes with unique obstacles:

  • Regulatory compliance: The healthcare industry is heavily regulated, with recent privacy legislation requiring stricter due diligence practices. Medtech companies often collect sensitive user data and in addition to conducting cybersecurity due diligence, buyers must ensure that the target’s data collection policies and practices
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Grow on! Examining the forces behind increased M&A activity in Canada

The Canadian market has seen a surge in M&A activity since 2017 and it looks as though 2018 will follow suit. According to a PwC Canada 2018 M&A mid-year review, in the first half of 2018 alone, Canada hit CAD$93 billion  in M&A activity and outbound deals increased by 8% as compared to the first half of 2017, largely due to a surge in cannabis sector deals. While we have noted this increase previously, recent legislative changes regarding cannabis warrant another look to determine the robustness of this trend. For example, in health-care, overall deal value and deal volume … Continue Reading

A healthy dose of deal-making: M&A trends in the US and Canadian healthcare sector

In the first quarter of 2018, M&A activity across the world hit a 17 year record high according to Mergermarket’s Q1 2018 Global M&A Report. This is an 18 percent increase in value compared to the first quarter of 2017. This increase was affected by the surge in deal-making seen at the end of 2017 which carried over into 2018 as the US experienced mega US healthcare deals. In fact, US M&A activity during Q1 2018 was reported to represent 44.2% of the total global share. According to data from Bloomberg, the healthcare sector has already reported $156 billion … Continue Reading

Private equity investments in healthcare: a look into the future

Last year was a record-breaking year for private equity investments in the healthcare industry, with a total disclosed deal value reaching $36.4 billion by the end of 2016. Mid-year reviews of 2017 indicate a downward trend in the number of private equity investments but a significant increase in the value of investments compared to 2016. According to the Global Healthcare Private Equity and Corporate M&A Report 2017 by Bain & Company, investors will want to increase the weight of healthcare in their portfolios given the growing population and increase in demand for healthcare.

With the ongoing regulatory reform and the … Continue Reading

Private equity trends towards specialization

Competition has increased in the private equity (PE) market. In the US, PE firms paid a 31% premium for acquisitions in 2016, an eight-year high according to Bloomberg data. There are a growing number of market participants chasing after ever scarcer quality businesses thereby causing price appreciation of businesses. In addition, the availability of low interest debt provides players with the financing to pursue these assets.

A competitive advantage

To remain competitive, there is a growing sentiment that PE firms should look to specialize, which many have already been doing. It can be difficult for PE firms … Continue Reading

2017 M&A outlook

Business peopleAs 2016 draws to a close, Ernst & Young has released its 15th edition of its Global Capital Confidence Barometer (the GCCB), which looks forward toward the trends and expectations in the M&A market for 2017. The GCCB is survey of more than 1,700 senior executives, including 52 Canadian executives, from large global companies located in 45 countries around the world, representing 18 industry sectors.

This past year was an active time for M&A and according to the GCCB, this trend will continue into the new year. In total, 57% of all executives surveyed plan to make acquisitions … Continue Reading

President Elect and M&A: a cross roads or business as usual?

can-us-680x220The election of Donald Trump as President of the United States adds to a cascade of political events that have surprised observers and may have profound effects on global flows of people, capital, and goods.

While nothing is set in stone, Donald Trump and his administration have led us to believe that they are contemplating significant changes to areas that may, indeed, have an effect on North American M&A.

A new American protectionism?

Trump campaigned on a promise to renegotiate the North American Free Trade Agreement (NAFTA), which he has called “the single worst trade deal ever approved … Continue Reading

A global overview of M&A activity: August 2016

World MapMergerMarket Group recently published its September edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world for the month of August 2016. More than two thirds into the year, August was no exception to the recent rather sluggish growth in M&A activity, especially compared to the record-breaking year for M&A in 2015.

Global M&A

August saw a total of 946 deals worth US$182.2bn, the lowest-valued August since 2013 (US$152.7bn) and down 34.7% from August 2015’s US$278.9bn. The Energy, Mining & Utilities sector spearheaded activity by contributing 15.8% to the total global market share with 84 … Continue Reading

M&A activity in the healthcare sector is on the rise

M&A activity in the healthcare industry has been on an upwards trend since our last update. Good Foundations: Building Healthcare M&A and Real Estate, a report by Mergermarket on deal-making trends in the industry, found that about 90% of the respondents expect healthcare M&A to rise over the next year. The value of healthcare deals in North America increased by 28% and reached a total of US$298 billion in 2015.

The North American healthcare industry is rapidly evolving and demanding that companies innovate to stay relevant. Several fundamental shifts, such as the move from fee-for-service to value-based care, … Continue Reading

M&A prospects in the healthcare industry

RR Donnelley’s August 2016 VENUE Market Spotlight focused on the healthcare industry and the prospects for M&A activity in that space over the next 12 months. The report notes that there were 678 healthcare transactions in the first half of 2016 with an aggregate value of US$171.3 billion globally. These figures represent declines of 5% and 6%, respectively, from the same period in 2015, though they are up significantly from 2014, and respondents to the survey indicated that they expect investments in digital health, biotechnology and medical devices to increase in the future.

According to the report, global factors driving … Continue Reading

What can companies learn from PE sharks?

Divestment is one strategy that a corporation can use to unlock funds for future growth and create long‑term shareholder value. According to a recent E&Y study, a successful divestment must meet three criteria: (i) it must create a positive impact on the valuation multiple of the remaining company; (ii) it must generate a sale price above expectations; and (iii) it must close ahead of its timing expectations. Only 19% of the companies surveyed for the study met all three criteria. Considering that divestiture activities are likely to increase in 2016 (a more detailed discussion on 2016 divestiture outlook can … Continue Reading

An overview of global M&A activity: 2015 into 2016

2015 was an extraordinary year for global M&A activity. Mergermarket recorded almost 17,000 transactions worth a remarkable US$4.3tn. This topped the previous record set in 2014 by over 30%. The race for top performing sector this year was very close. Energy Mining & Utilities won with US$630bn in deal value; however, the top performers were only separated by US$150bn. The other four sectors in order are: Pharma, Medical and Biotech, Consumer, Financial Services and Industrial Chemicals.

North America

Once again North American markets lead the way with almost 1/3 of global deals and nearly 50% of global deal value. The … Continue Reading

Year in review: deal drivers in the Americas in 2015

Mergermarket recently released its 2015 full-year edition of Deal Drivers Americas (the Review). This comprehensive review of M&A activity in the Americas confirmed that 2015 was a year of mega-deals. Transactions involving giants such as Pfizer, Time Warner Cable, and Kraft contributed to an increase of 30% in M&A value, reaching a total of US$4.28 trillion across North America. In the US alone, deal value rose 40% since 2014, hitting a record high of almost US$2 trillion.

The Review evaluated by sector and by region. Some of the sector highlights include:

  • Technology, media and telecom: Technology, media and telecom
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New Year’s resolution: buying & selling smart

2015 was a huge year for global M&A with deal activity reaching $4.2 trillion by the middle of December.  If 2016 continues at the same pace, be prepared for a big year of M&A activity. In order to be well equipped for the upcoming year, ask yourself the following two questions when contemplating an M&A transaction.

Where are the key market opportunities?

According to the publication released by Raconteur entitled M&A Outlook 2016, on a global scale, five sectors are “blazing a trail”: financial services, telecommunications, pharmaceuticals, computer manufacturing, and oil and gas.

  • Financial Services – Consolidation is the
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A global overview of December 2015 M&A activity

According to Mergermarket’s December insider, November 2015 was a record setting month for M&A activity. By the end of the month, global M&A value reached US$3.9tn which surpassed the 2007 full year record by almost 6%. This record came on a drop in volume by 1,228 transactions which further cements 2015 as the year of the mega deal. The top sector was Pharma, Medical & Biotech (PMB) with 84 transactions representing US$201.3bn. The driver behind this sector was the record breaking US$183.7bn Pfizer Inc.’s bid for Allergan PLC. This represented over 90% of PMB’s total deal … Continue Reading

M&A in Canada: industry revenue and profits

Expanding growth in nearly all sectors

Norton Rose Fulbright focuses its services on 6 key industry sectors and, according to a study released recently by the Globe and Mail on Canadian corporations, almost all of these sectors have seen an expansion in revenue and most have seen growth in profits during the period from 2011 to 2015. While such expansion does not on its own drive M&A activity, it is important factor for identifying trends. Industries with the greatest growth may see increased M&A activity in the future; likewise industries with prolonged under-performance may be primed for consolidation.

Banking

1

The … Continue Reading

M&A in Q1 2015: the results are in

The Mergermarket Group has published its Monthly M&A Insider – April 2015 report outlining trends and developments in M&A activity worldwide for the first quarter of 2015.

In North America, M&A activity continued on the upward trend set in 2014. The first quarter saw 1,116 deals valued at US $338.8 billion, which was a 11% increase compared to the first quarter of 2014. This increase was in no small part driven by the Heinz/Kraft deal, valued at $54.4 billion. The Pharmaceutical, Medical and Biotech industry was also a significant driver in the first quarter of 2015, which saw 122 deals … Continue Reading

M&A: a leading growth strategy in 2015

The economic fundamentals that drive M&A are back at pre-crisis levels, states a new survey published by KPMG. The number of acquisitions that companies will undertake is expected to increase in 2015: 82% of respondents plan at least one acquisition and 10% anticipate 11 or more acquisitions next year.

Indeed, the survey suggests M&A is an attractive growth strategy for the upcoming year since financing conditions are favourable and organic growth prospects appear to be limited. Fundamental M&A drivers such as healthy credit markets, large cash reserves and steady job growth rates are aligning and ready to light up … Continue Reading

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