The Health Care Investor : Healthcare Lawyers & Attorneys for Life Science Companies & Investors

In a December report on hospital value-based purchasing from CMS, nine of the top 10 performing U.S. hospitals were physician owned, according to an American Medical News report. In fact, this list identified 48 physician-owned hospitals in the top 100.

Physician Hospitals of America (PHA) President Paul Kerens noted in a recent issue of PHA ePulse, PHA's e-publication, that the new quality data from CMS that shows physician-owned hospitals "very favorably" will be included in the association's efforts on the Hill.

Despite this impressive performance by the small industry (there are less than 240 physician-owned hospitals nationwide), there are serious limitations on expansion of existing and development of new physician-owned hospitals due to changes to the Stark Law included in the Patient Protection and Affordable Care Act (PPACA).

The physician-owned hospital industry, led by advocacy association PHA, has fought against the 2010 PPACA-imposed limitations, including the various predecessor provisions appearing in bills that pre-dated PPACA. Supporters of physician-owned hospitals continue to seek ways that the restrictions can be legislatively refined into more manageable provisions that are good for clinical care and the broad hospital industry generally.

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Harvest Partners, LP, has announced it has acquired AxelaCare Holdings, Inc., from Excellere Partners.

Harvest Partners is a middle-market PE firm based in New York.

AxelaCare, based in Lenexa, Kansas, is a full-service home infusion therapy provider.

Excellere Partners is a middle-market PE firm based in Denver.

Financial terms were not disclosed.

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Argon Medical Devices has completed its acquisition of the interventional products business of Angiotech Pharmaceuticals Inc., according to a news release.

Argon Medical Devices, based in Plano, Texas, is a manufacturer of specialty medical products, in areas including interventional radiology, vascular surgery, interventional cardiology and critical care procedures. It is a portfolio company of Lake Forest, Il.-based PE firm RoundTable Healthcare Partners.

Angiotech Pharmaceuticals, headquartered in Vancouver, British Columbia, Canada, develops, manufactures and markets medical devices primarily within the areas of interventional oncology, wound closure and ophthalmology.

Financial terms of the acquisition were not disclosed.

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Bain Capital LLC and Thomas H. Lee Partners are the two remaining bidders for Carestream Health Inc., according to a Reuters report.

Carestream Health, headquartered in Rochester, N.Y., is a worldwide provider of dental and medical imaging systems and healthcare IT solutions; x-ray film and digital x-ray systems for non-destructive testing; and advanced materials for the precision films and electronics markets.

The company was formed in 2007 when Onex Corporation, a Toronto-based PE firm, acquired Eastman Kodak Company's Health Group and renamed the business as Carestream Health.

Bain Capital and Thomas H. Lee Partners are both PE firms based in Boston.

The auction of Carestream had also drawn interest from Carlyle Group LP, , Hellman & Friedman LLC and KKR & Co LP, according to earlier reports.

The deal could be valued at upwards of $3.5 billion.

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Sarnova, Inc. has announced it has acquired Progressive Medical International Inc.

Sarnova, based in Dublin, Ohio, is a specialty distributor of healthcare products in the EMS and acute care markets.

Progressive Medical International, based in Vista, Calif., distributes new and refurbished EMS equipment and supplies.

Financial terms were not disclosed.

This is the sixth acquisition for Sarnova since Water Street Healthcare Partners invested in the company in 2008.

Water Street Healthcare Partners, based in Chicago, is a strategic PE firm focused exclusively on health care.

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Infinity Homecare, LLC has announced it has completed its acquisition of Advanced Homecare, LLC and AHC Southwest LLC (collectively, "Vitalcare").

Infinity Homecare, headquartered in Sarasota, Fla., provides home health services in Florida through licensed and Medicare-certified agencies.

Vitalcare Home Health, headquartered in Tampa, Fla., provides home health services including nursing and rehabilitation services as well as specialty programs.

Financial terms were not disclosed.

Infinity Homecare is a portfolio company of HealthEdge Investment Partners, a PE firm headquartered in Tampa, Fla., that focuses exclusively on the healthcare industry.

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We have previously posted links to the monthly column that we write for Law360.  This month we co-authored a piece with our partner Bart Walker addressing three current legal issues in ASC investments.  The article discusses three legal issues garnering a lot of attention in the industry and is available here at http://www.law360.com/articles/432790/3-trapdoors-in-surgery-center-investing . 

Our firm, especially with our partner Scott Becker,  has significant experience representing ambulatory surgery centers, surgical hospitals and similar outpatient surgical providers as well as lenders and private equity investors in the space.   If you are interested in discussing these issues, attending our upcoming conferences or listening to a recent webinar we hosted on ASC issues with industry leaders, please contact me. 

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Water Street Healthcare Partners has announced it has acquired CCBR-SYNARC.

CCBR-SYNARC is a provider of clinical services to pharmaceutical and biotechnology companies. The company's SYNARC business, based in Newark, Calif., specializes in imaging services, consultation and analysis to track progress throughout a clinical trial's life cycle. The CCBR business, based in Copenhagen, Denmark, recruits patients and conducts and manages clinical trials in its dedicated clinical centers.

Water Street Healthcare Partners, based in Chicago, is a strategic PE firm focused exclusively on healthcare.

No financial terms were disclosed.

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Carestream Health is drawing interest from several private equity firms, according to a Reuters report.

Carestream Health, headquartered in Rochester, N.Y., is a worldwide provider of dental and medical imaging systems and healthcare IT solutions; x-ray film and digital x-ray systems for non-destructive testing; and advanced materials for the precision films and electronics markets.

The company was formed in 2007 when Onex Corporation, a Toronto-based PE firm, acquired Eastman Kodak Company's Health Group and renamed the business as Carestream Health.

The auction of Carestream has drawn interest from Bain Capital LLC, Carlyle Group LP, Thomas H. Lee Partners, Hellman & Friedman LLC and KKR & Co LP, according to the report.

The deal could be valued at upwards of $3.5 billion.

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Grifols has announced it has acquired 60 percent of Spanish biotechnology firm Progenika Biopharma.

Grifols, headquartered in Barcelona, Spain, is one of the world's largest producers of plasma medicines.

Progenika, headquartered in Vizcaya, Spain, designs, produces and commercializes in vitro diagnostics tests.

Grifols acquired the majority stake in Progenika for 37 million Euros (~$48 million).

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Heart to Heart Hospice has received a minority investment from Summit Partners.

Heart to Heart Hospice, based in Plano, Texas, is a provider of hospice care in Texas.

Summit Partners, which has its U.S. office in Boston, is a growth equity firm.

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Dynamic Healthcare Services Inc. has announced it has acquired APO2.

Dynamic Healthcare Services, based in Irvine, Calif., is a provider of home medical equipment, respiratory therapy products and services, along with complex rehabilitation products and services. It is a portfolio company of GMH Ventures, a private equity group headquartered in Newtown Square, Pa.

APO2, based in Hazleton, Pa., is a provider of home oxygen delivery systems, CPAP, sleep apnea products and consumer power mobility products.

Financial terms were not disclosed.

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The biotech field may see an increase in M&A in 2013, according to a Boston Business Journal report.

Contributing factors include expiring patents on notable drugs (such as the recent expiration of the Lipitor patent and expected 2014 expirations of Cymbalta and Nexium patents) and large drug companies cutting their research and development budgets, with acquisitions as a means to make up for possible lost revenue.

An M&A report from HBM Partners, an investment firm based in the Cayman Islands, concluded that 2012 was a strong year for trade sales of North American and European biotech companies. And according to an Ernst & Young news release, the financial capacity of big biotech to conduct deals increased 61% between 2006 and 2012.

We will continue to track private equity activity in the space in our Deal Tracker.

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IMS Health has announced it has acquired Appature.

IMS Health, which has its global headquarters in Danbury, Conn., is a provider of healthcare information, technology and services.

Appature, based in Seattle, is a software-as-a-service company. Xconomy reports Appature had raised almost $10 million in two financing rounds from venture capital firms Madrona Venture Group, based in Seattle, and Ignition Partners, based in Bellevue, Wash.

Geekwire reports the deal's value exceeded $100 million.

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