Healthcare Acquisitions in August and September 2018

September, 2018

1. Best Buy Co. Inc., An American multinational consumer electronics retailer, acquired the personal emergency response services provider, GreatCall in August 2018. The acquisition amount was estimated to be $800 million in cash. Best Buy wants to strengthen its position in the growing ageing market with this acquisition. The acquisition will also support the company’s new pilot service, Assured Living, which utilizes digital tools to support users to check the health and safety of elderly parents. At present, GreatCall has over 900,000 paying subscribers, supporting consumers. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close by the end of Best Buy's fiscal 2019 third quarter.

2. PepsiCo Inc. Announced its decision to acquire all outstanding shares of SodaStream, a provider of flavored water drinks, in August 2018. PepsiCo acquired SodaStream for $144.00 per share in cash, representing a 32% premium to the 30-day volume weighted average price and a transaction valued at $3.2 billion. The emerging threat of a sugar tax, and the rise of health-conscious consumers have led PepsiCo to come up with healthier snack and beverage options.

3. In August 2018, Harris Healthcare Inc., A wholesale distributor of surgical and other medical instruments, acquired Iatric Systems, which focuses on integration tools in order to aid hospitals to optimize their electronic health records and other IT infrastructure. This acquisition will increase the offerings of Harris Healthcare in the healthcare information technology segment.

4. In September 2018, Stryker Corp. Announced plans to purchase K2M Group Holdings, a manufacturer of spinal surgery products, for $1.4 billion. Stryker’s purchase of K2M enables the firm to increase its spinal offering with the company planning to retain K2M’s sales force in a bid to reduce disruption. The deal is anticipated to be completed by the end of 2018.

5. Headspace, An English-American online healthcare company, confirmed the purchase of the voice-enabled AI system, Alpine.AI in September 2018. Details of the cost of the total deal are currently undisclosed. Alpine.AI’s technology is utilized by Amazon Alexa and Google Assistant to provide its users the ability to communicate with their meditation services via voice technology. Headspace is expected to come up with FDA approved meditation app after this acquisition to utilize the products to treat a range of chronic diseases.

6. Persistent Systems, A Pune-based technology services company, announced its acquisition of a US tech startup, Herald Health in September 2018. The acquisition was valued at $5.2 million, with $2.3 million paid upfront and the remaining $2.9 million to be offered as a deferred payment for management employees over a period of three years, dependent on performance. This acquisition is expected to strengthen the IP portfolio of Persistent Systems in the Healthcare market.

7. Hospital Corporation America (HCA) Healthcare announced its plans to acquire Mission Health, a non-profit North Carolina health system for $1.5 billion in September 2018. Under the agreement, HCA will acquire 763-bed Mission Hospital in Asheville; 80-bed CarePartners Rehabilitation Hospital in Asheville; 49-bed Mission Hospital McDowell in Marion; 25-bed Angel Medical Center in Franklin; 25-bed Transylvania Regional Hospital in Brevard; 25-bed Blue Ridge Regional Hospital in Spruce Pine; and 24-bed Highlands-Cashiers Hospital in Highlands.

8. The Walgreen Company, The Second-largest pharmacy store chain in the US, announced the acquisition of Fred’s Inc., the discount general merchandise store, in September 2018. The total acquisition amount summed up to $165 million with an amount equal to the value of related pharmacy inventory. Walgreens, through this asset purchase agreement, would acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states in the US.

9. Evolent Health Inc., A Provider of healthcare delivery and payment solutions, acquired New Century Health’s business for up to $217 million in September 2018. New Century Health is a technology-enabled, specialty care management company, which manages approximately 462,000 Medicare Advantage lives under performance-based arrangements and provides administrative services (ASO) to several partner organizations. This acquisition is expected to support provider organizations and health plans with clinical management and operational capabilities.

-Victor Mukherjee,
Assistant Manager,
Infoholic Research