Dental Products Market Analysis – October 2013

Geographic expansion and advanced technology help drive acquisitions in the dental products market.

The dental products market is expected to grow at an annualized rate of around 7%, reaching $27.6 billion by 2015.¹

Revenue multiples are currently tracking at a median of 1.7x, while EBITDA multiples have a median of 12.8x. Since 2011, these have seen 55% and 21% increases, respectively. Transaction multiples are tracking in a slightly higher range, with median revenue multiples of 3.2x and median EBITDA multiples of 13.7x over the past two and a half years.

One major trend in the industry is that companies are using acquisitions as a means to expand their geographical reach. Companies aim to reinforce their position in existing markets as well as accelerate their international expansion and access emerging markets.

Medical Reprocessing Market Analysis – September 2013

Medical reprocessing market sees renewed growth as healthcare providers face pressures to manage costs and increase sustainability.

The global medical sterilization, repair, and refurbishment industry is expected to reach roughly $13 billion by 2017.¹

Revenue multiples in the public markets are currently tracking at a median of 2.1x, while EBITDA multiples have a median of 9.5x. Since the end of 2012, these have grown 31% and 48% respectively.

Transaction multiples are tracking in a similar range, with median revenue multiples of 1.6x and median EBITDA multiples of 8.1x over the past two years. The slight dip in multiples in 2011 and 2012 contributed to a lower median. While the market underperformed the S&P index in 2011 and 2012, recent regulatory pressures for hospitals to cut costs have renewed industry growth.

Healthcare Insurance Services Market Analysis – July 2013

The healthcare insurance services market has been undergoing diversification, innovation and consolidation.

The insurance services industry is highly fragmented, with several small-scale players alongside large outsourcing firms that dominate the market. However, market forces have been driven by continually rising healthcare costs, regulatory changes to the health insurance industry, and, subsequently, a more consumer-driven health insurance business model. These trends have forced market players to diversify, innovate, and consolidate in order to remain competitive now and in the future.

Insurance services companies are seeking to diversify their product portfolio in order to offer health insurance companies a comprehensive, end-to-end solution. TriZetto, an insurance services industry leader, has made seven acquisitions between 2011 and 2013 in a variety of areas such as payer-provider connectivity, business process outsourcing, compliance readiness and claims management.

Brocair Managing Partner Participates in Healthcare Panel

Gregg Blake Offers Insight During Capital Forum with Cold Spring Harbor Laboratory

Melville, NY – June 20, 2013 – The Long Island Capital Alliance (“LICA”), the leading non-profit capital formation and business development organization serving regional companies, today announced the successful completion of its Biotech Technology Transfer Capital Forum held on June 14, 2013. The capital forum, held in collaboration with Cold Spring Harbor Laboratory (“CSHL”), showcased four scientific discoveries which can form the basis for new businesses which are based on technologies developed by CSHL scientists.

A panel of technology investors also participated in the event. The panel provided insights on the presenting scientists’ business plans and their investment potential, as well as a review of the current investment climate for technology transfer within the biotechnology sector.

Neil Kaufman, chairman of LICA, stated that, “We are extremely excited to have showcased some of the most advanced biotechnology discoveries made at CSHL which are ready for transfer to the commercial marketplace. A large number of investors and local business leaders turned out to hear about these insightful technology transfer concepts from CSHL, including the treatment of diabetes, obesity and cancer, enhanced drug development and research tools and healthcare products. CSHL is clearly shaping contemporary biomedical research and we are pleased to have been able to collaborate in bringing their technologies toward monetization in a way that is intended to create locally-based companies.”

“The LI Capital Forum meeting was well attended by a cross section of experienced, knowledgeable and interested professionals. The Q&A panel was particularly experienced and helpful to all involved,” said John Maroney, Vice President, In-House Counsel at Cold Spring Harbor Laboratory (CSHL). “As a global leader in biomedical research, CSHL is interested in pursuing technology transfer opportunities that will bring our scientific expertise into commercial application and our scientist entrepreneurs who participated benefitted from the interaction.”

“The forum presented a unique opportunity to connect with the investment community and we found there to be a lot of interest as we implement our strategy for commercialization as a profitable business from our present status as an advanced stage not-for-profit entity,” said Professor Lloyd Trotman, a CSHL presenter.

Professor Nicholas Tonks of CSHL commented, “I found the forum to be very helpful – it provided important insights into how best to communicate scientific breakthroughs to the business community. The feedback from the panel regarding what they viewed as important attributes of early stage companies was valuable. The opportunity to present our work and to meet members of the business community also helped to make potentially productive connections.”

“I was fascinated by all three presenters and I’m looking forward to following up to determine our role in funding their commercialization,” said Scott Livingston, President of Livingston Securities, a leading investment bank focusing on disruptive technologies and their impact on healthcare, energy, infrastructure and other leading sectors of the American and global economy.

Biotech Technology Transfer Capital Forum
Presenting Companies and Technologies

The following presentations were given at the Capital Forum:

A Novel Treatment for Diabetes, Obesity and Cancer: exploiting an oral dosage of a key regulator of insulin, leptin and HER2 oncogene function. (Professor Nicholas Tonks, FRS)

RapidCaP: the next generation platform to cure metastatic prostate cancer. (Professor Lloyd Trotman)

Velocin-N™: a new enzyme that enables faster, more sensitive and more selective detection of proteins (the miniature machines and structures of life) in mass spectrometers. (Dr. John Wilson)

Wilson Advanced Research: develops products with novel health, social and commercial benefit, spanning a wide range from consumer products to environmental clean-up, including a simple solution to eliminate the largest reservoir of bacteria–including MURSA and E. coli 0157– from homes. (Dr. John Wilson)

Biotech Technology Transfer Capital Forum
Industry Experts

The following industry investors participated in the panel discussion at the Capital Forum:

•Gregg Blake, Founder of Brocair Partners, which provides financial and strategic advisory services to healthcare companies.
•Larry Chaityn, Managing Director and Head of Global Health Care Banking at Kaminski Partners, a global investment bank.
•Scott Livingston, President of Livingston Securities, an investment bank specializing in the nanotechnology and biosciences industries.
•Steve Winick, Principal of Topspin Partners, one of Long Island’s leading venture capital firms.

About the Long Island Capital Alliance:

Since 1984, the Long Island Capital Alliance (www.licapital.org), formerly known as Long Island Venture Group, has been promoting business growth on Long Island. LICA seeks to create a productive and business-friendly environment that will afford area businesses access to the resources necessary to compete successfully in today’s markets. LICA serves as a focal point for the exchange of ideas among new and existing business enterprises, successful entrepreneurs, investors, and service providers. Through quarterly capital forums and special meetings, LICA brings together members of the region’s business community, and has been recognized as the place to turn to when small businesses need equity, debt, or other financing, or for investors to find an attractive investment opportunity.

LICA’s mission is to encourage economic development on Long Island by facilitating capital formation for a broad range of companies in various industries, from early stage to mature middle market closely held and publicly-traded businesses. LICA accomplishes this primarily through education, networking, quarterly capital forums, periodic special educational meetings, and alliances with other regional organizations. LICA brings together members of the region’s business community and serves as the finance arm for significant local business and organizations.

About Cold Spring Harbor Laboratory

Founded in 1890, Cold Spring Harbor Laboratory (CSHL) has shaped contemporary biomedical research and education with programs in cancer, neuroscience, plant biology and quantitative biology. CSHL is ranked number one in the world by Thomson Reuters for impact of its research in molecular biology and genetics. The Laboratory has been home to eight Nobel Prize winners. Today, CSHL’s multidisciplinary scientific community is more than 600 researchers and technicians strong and its Meetings & Courses program hosts more than 12,000 scientists from around the world each year to its Long Island campus and its China center. Tens of thousands more benefit from the research, reviews, and ideas published in journals and books distributed internationally by CSHL Press. The Laboratory’s education arm also includes a graduate school and programs for undergraduates as well as middle and high school students and teachers. CSHL is a private, not-for-profit institution on the north shore of Long Island. For more information, visit www.cshl.edu.

Healthcare Staffing Industry Perspective – June 2013

The U.S. Healthcare Staffing industry is currently valued at roughly $14 billion, and is expected to grow at a CAGR of 3.1% from 2013 to 2018.

Healthcare staffing agencies provide recruitment services to healthcare providers for positions such as physicians, nurses and allied healthcare professionals. Their services consist of permanent and temporary placement, evaluation-to-hire, retained search and direct independent contracting services.

Roughly 75% of the industry’s revenue is derived from permanent and temporary employee placement services.

Permanent and temporary recruitment is comprised of physician, nurse, pharmacist and allied health staffing. Allied health encompasses most professions within healthcare staffing other than physician and nurse staffing, including: radiology, occupational therapy, human resources, medical coding, medical assistance, health care administration, physical therapy, etc.

Brocair Partners quoted in Article on Latin American OTC Deal

Reckitt Benckiser, Bristol-Myers sign $482M pact

New York biopharmaceutical company Bristol-Myers Squibb Co. announced Tuesday, Feb. 12, that it struck a collaboration agreement with Slough, U.K., healthcare and consumer products business Reckitt Benckiser Group plc worth $482 million.

By Thomas Zadvydas

TheDeal.com

February 12th, 2013 – Terms of the deal state that Reckitt Benckiser will pay Bristol-Myers $438 million up front for the exclusive rights to sell, distribute and market seven medicines primarily sold in Latin America for a three-year period.

The compounds are Picot, an antacid; Tempra, a pain reliever and fever reducer; Micostatin, an antifungal treatment; Graneodin, a cough and cold medicine sold primarily in Mexico; Dermodex, an anti-rash cream; Luftal, an anti-gas medicine; and Naldecon, a cold and flu symptoms treatment, sold mainly in Brazil.

“[The deal] increases our consumer healthcare capability in Latin America,” Reckitt Benckiser senior vice president Andraea Dawson-Shepherd said. “It’s a good set of brands.”

The assets had net revenue for the year ended Dec. 31 of $102 million, Reckitt said.

Bristol-Myers will retain responsibility for manufacturing all of the products covered by the collaboration during its terms. Reckitt Benckiser will purchase products from Bristol-Myers and pay royalties on product sales.

The deal also includes a $44 million payment of an option fee by Reckitt Benckiser to Bristol-Myers for the right to purchase the medicines outright at the end of the three-year term. The final purchase price would be based on average net sales during the two-year period before the closing of the acquisition. No manufacturing facilities will be transferred as part of the deal.

One banker sees the deal as a bet on the expanding middle class in the region with larger disposable incomes.

“Latin America is an [expanding] healthcare market,” said managing partner Gregg Blake of healthcare boutique Brocair Partners. “If you take Brazil for instance, a lot of people over the last 10 years have moved up into the wealthier economic classes.” Blake estimates the healthcare market in Brazil to stand at about $209 billion and the market in Mexico to be worth about $65 billion.

“And it’s growing,” he added.

Reports surfaced in January that Bristol-Myers was seeking a buyer for some of its brands in Mexico and Brazil worth as much as $750 million. The transaction is subject to customary closing conditions, including competition law clearance by authorities in Brazil and Mexico.

“Bristol-Myers Squibb has worked to focus its businesses around the world on innovative medicines in areas of high unmet medical need,” CFO Charles Bancroft said in a statement Tuesday.

Kevin Sheridan, Abid Rizvi and Dung Nguyen at Jefferies & Co. advised Bristol-Myers on the deal. David Fox, Daniel Wolf and Joshua Zachariah at Kirkland & Ellis LLP were legal counsel. Simon Smith, Siddhart Nahata, Susan Huang and Pedro Costa at Morgan Stanley advised Reckitt Benckiser, while Toby Myerson, Steven Williams, Chuck Googe and Andrew Gaines at Rifkind, Wharton & Garrison LLP were legal counsel.

Bristol-Myers didn’t return calls Tuesday.

Bristol-Myers shares fell 31 cents, or 0.84%, to $36.62, on Tuesday afternoon. Reckitt Benckiser shares closed up 27.16 pence, or 0.64%, to 4,262.16 pence, Tuesday afternoon in London.

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Dental Products Industry Perspective – November 2012

The U.S., Europe and Japan are the dominant dental markets, collectively accounting for more than 85% of global revenue.

In recent years, an aging population coupled with rising awareness of the importance of oral health, higher aesthetic standards and improved dental treatments have boosted the growth of this segment. In a recent study, the American Dental Association reported that a person’s smile outranked eyes, hair and body as the most important physical feature.

All of these factors have brought the global dental equipment and consumables market to an estimated size of US$19.7 billion in 20101. This market, driven by technological advancements, is expected to grow at a compound annual growth rate (CAGR) of 7%, reaching an estimated size of $27.6 billion by 2015,

Brocair advises Biomain AB in sale to Heraeus Group

Brocair Partners LLC, an investment bank serving the healthcare industry, advised Biomain AB in its sale to Heraeus Group

NEW YORK, NY – March 5, 2012 – Brocair Partners LLC, an investment banking firm serving the healthcare industry, in conjunction with Experia Corporate Finance Advisors AB, based in Stockholm, advised Biomain AB, a Helsingborg, Sweden-based dental prosthetics company, on their sale to Heraeus Dental, part of the Heraeus Group, a precious metals and technology holding company based in Hanau, Germany.

The acquisition strengthens Heraeus’ presence in the Northern European dental market and expands its patent and product portfolio in digital implant prosthetics.

Gregg Blake, Managing Partner of Brocair, explained, “Biomain had a set of products and intellectual property that had enabled them to attain a dominant position in the Nordics in the CAD/CAM dental prosthetics space. This is a rapidly growing market, and we found there was strong demand from major dental industry players with a strategic interest in the field. The valuation reflected the competitive nature of the process and the high level of strategic interest.”

Anders Williamsson, Chairman of Biomain, remarked “As Chairman of the business, I was impressed with the speed and quality of the investment banking effort, and the transaction value was an exceptional endorsement of the quality of the business. The Board and owners were extremely pleased with the whole process, and the outcome was a classic win-win situation for both the company and the buyer.”

Håkan Persson, Managing Partner of Experia, commented “This demonstrates again the virtues of a transatlantic advisory team with members from both Brocair and Experia. With professionals covering our different geographies and time zones, we could market the opportunity to all relevant parties, creating the competitive selling process that was the key to the successful outcome for our client.”

Mr. Blake summarized, “The transaction was an excellent fit for both parties—Biomain has the advantage of being part of a larger platform, and Heraeus has an opportunity to expand its product range and market share in Northern Europe.”

The purchase price was not disclosed, but Swedish press reports indicate the valuation was in excess of SEK 200 million.

Founded in 2002, Biomain AB, based in Helsingborg, Sweden, is the Scandinavian market leader in the field of custom CAD/CAM-produced implant prosthetics and has a workforce of 40 employees.

Heraeus, the precious metals and technology group headquartered in Hanau, Germany, is a global, private company with 160 years of tradition. Its fields of competence include precious metals, materials and technologies; sensors; biomaterials; and medical products, as well as dental products, quartz glass, and specialty light sources. With product revenues of €4.1 billion and precious metals trading revenues of €17.9 billion, as well as more than 12,900 employees in over 120 subsidiaries worldwide, Heraeus holds a leading position in its global markets.

Outpatient Rehabilitation Market, July 2011

The rehabilitation therapy industry in the U.S. consists of about 30,000 establishments with combined annual revenues of approximately $20 billion. The industry is highly fragmented, with the top 50 companies accounting for less than 25% of total revenue.

More specifically, the outpatient rehabilitation industry accounts for nearly $5 billion of Medicare spending in the U.S. This figure has been rising steadily, and has more than doubled since 2000.

The three primary classifications within outpatient rehabilitation are physical therapy, occupational therapy, and speech language pathology.