Definition
Valuation Issues
Opportunities
- Product development – use of eHealth technology and the internet to connect patients, their health care records and providers to each other.
- Opportunities in manufacturing generic drugs.
- Growth of wellness and anti-ageing treatments,
Challenges
- Maintaining margins in the increasingly competitive wellness industries as pricing pressures increase.
- Continued decline in Australia’s manufacturing base makes the production of health, cosmetics and toiletry related items less competitive than offshoring.
2016 Transactions
Globally, transactions volumes are increasing, but valuations (EBITDA multiples) remaining stable.
With a total deal value of AU$365M, there was a less than robust market in all aspects of healthcare ranging from pharmaceutical products and diagnostics to hospitals and home care services.
Alternate care was one of the bright areas with Total Face Group acquiring a group of anti-ageing clinics including Face Today and Rejuvenat8 for a sub $2M consideration as part of their ASX listing.
Australian Unity acquired the government operated Home Care Service of NSW for $114M while Affinity Equity Partners acquired Primary Health Care’s GP practice management software business for $155M.
Finally, in August, Australian based Sasmar Pharmaceuticals acquired US based Aquatrove Biosciences, a biotech focused on R&D in human reproductive health and fertility.