23 October 2006
Sydney, 23 October 2006: Strong M&A activity in the healthcare sector is contributing to a busy period for the M&A team at national law firm Clayton Utz, which is currently advising Mayne Pharma Limited on its A$2.6 billion plus acquisition by US-based hospital products manufacturer Hospira by scheme of arrangement.
The deal, which was announced on 21 September, reached an important milestone today with the filing of scheme documentation with the Australian Stock Exchange. Last Friday, the Supreme Court of Victoria approved the release of scheme documentation to shareholders and the convening of a shareholder meeting.
Clayton Utz national M&A practice head, Rod Halstead, and Corporate/M&A partner Jonathan Swain, were appointed to advise the Mayne Pharma Board and senior management after the Board received an unsolicited and conditional proposal to acquire the company. Clayton Utz advised Mayne Group Limited on its historic $3.5 billion de-merger last year.
Mr Halstead and Mr Swain advised the Board on a due diligence process conducted with a limited number of interested parties, with Hospira's offer ultimately being recommended to shareholders. Under the proposed scheme of arrangement, Hospira will acquire all outstanding shares in Mayne Pharma for $4.10 a share, valuing the business at more than A$2.6 billion.
In another sign of heightened investor interest in Australia's healthcare sector, Mr Halstead has been representing Cytyc Victoria LLC in a hotly contested three-way bid for Australian medical instruments manufacturer Vision Systems Ltd. Cytyc Victoria LLC is a subsidiary of Cytyc Corporation, which provides diagnostic and minimally invasive surgical products targeting cancer and women's health.
Following an initial offer of $2.13 per share by Ventana Medical Systems, Cytyc came in with a bid of $2.35 per share after conducting due diligence. Both companies subsequently acquired stakes in Vision, with Cytyc then increasing its offer to $3.25 a share. Cytyc was ultimately outbid by global industrial design company Danaher Corporation, which made an offer of 3.75 a share, valuing Vision at $800 million.
Mr Halstead said both transactions reflected the growing interest by international investors in tapping into unrealised value in the pharmaceuticals and biotechnology sectors.
"We are seeing significant consolidation in the sector worldwide, with a number of transactions having been announced and completed over the last 12 to 18 months. In the pharmaceuticals sector in particular, there are acquisitions occurring on a worldwide basis as companies look to strengthen their exposure to generic pharmaceuticals companies," says Mr Halstead.
The Private Equity team at Clayton Utz is also benefiting from the surge in activity, having recently represented the financiers on the A$2.7 billion MBO of diagnostics and aged care specialist DCA Group by a private equity consortium of CVC Asia Pacific and CVC Capital Partners via scheme of arrangement. Banking & Finance partners Michael Riches and Geoff Geha represented Goldman Sachs JBWere and HBOS as financiers of the deal.
