Bain & Company: 2018 Global Healthcare Investment Report — Countercyclical Growth Amid a Capital Winter

Meanwhile, mid-sized funds (those that raised $1–5 billion over the past decade) are increasingly seeking to build new platforms through operational improvements to enhance returns. In 2017, approximately two-thirds of sponsor-led platform launches stemmed from acquisitions by large capital providers; in 2018, this proportion rose to over three-quarters. For example, WaterStreet Healthcare Partners sold its equity stake in Premise Health—the leading U.S. workplace healthcare provider—to OMERS Private Equity. Figure 7. Channels and Share of Successful Capital Exits Figure 8. Timing of Capital Exits 丨Intensifying Market Competition Drives Exploration of Novel Transaction Models In recent years, competition between financial sponsors and corporate acquirers for healthcare assets has intensified, pushing up average transaction values. Although the number of asset transactions in 2018 reached a record high, funds still cannot deploy capital at will; intensifying competition is prompting investors to explore more creative transaction models—such as joint ventures, increased focus on public markets, moving beyond traditional leveraged buyouts, and expanding value-creation frameworks. Seeking Joint Ventures Historically, larger PE funds preferred sole investments, which often yielded strong returns upon exit. However, as the number of PE funds has grown, competition has likewise intensified. Yet we are witnessing a shift toward co-investments (“co-invest”), with roughly 10% of PE funds now open to co-investing with other PE funds for mature or late-stage targets, and about 50% willing to co-invest with other types of investors. In co-investment scenarios, PE firms demonstrate greater openness to partnering, gaining access to previously unavailable opportunities through minority stakes—and retaining the option to increase their holdings later. For instance, CVC Capital partnered with PSP Investments and StepStone Group to acquire Italian pharmaceutical company Recordati at a 20% discount, for a total of $7.4 billion. The deal included approximately 52% of Recordati’s equity, plus a mandatory tender offer for the remaining 48%. This tender offer was scheduled for completion in February 2019. Given the numerous advantages, funds are increasingly partnering with corporations. Corporate involvement enhances fund credibility with target companies and generates synergies. In 2018, 18 publicly disclosed corporate partnership transactions totaled $7.9 billion—accounting for 12.5% of disclosed transaction value. For example, Summit Partners partnered with OptumHealth to announce a $2.2 billion acquisition of a controlling stake in Sound Inpatient Physicians. Collaborating with Optum provides opportunities to elevate service standards for hospital-based physicians and expand geographically—benefits that would not be available if Summit had pursued the investment independently. Looking Toward Public Markets Intensifying competition for private healthcare assets is driving investors to seek more opportunities in public markets.

Global Top 100: Italy’s Recordati Pharma—Nearly a Century of Specialization, Heavy Investment in Rare Diseases

In July 2023, Recordati Pharma Group announced an agreement with GSK (GlaxoSmithKline) to commercialize Avodart (dutasteride) and Combodart/Duodart (dutasteride + tamsulosin) across 21 countries—primarily in Europe—but excluding those where distribution agreements were already in place. Avodart and Combodart/Duodart are indicated for the treatment of moderate-to-severe symptoms of benign prostatic hyperplasia (BPH), and for reducing the risk of acute urinary retention (AUR) and surgery in patients with moderate-to-severe BPH. Rob Koremans, CEO of Recordati, stated: “This agreement provides Recordati with two leading originator brands, strengthening our presence in urology and complementing our current portfolio. It addresses diverse patient needs and offers differentiated positioning.” 01 Company Profile According to data from PharmexCloud (www.pharnexcloud.com): Recordati Pharmaceutical Group was founded in 1926 and is headquartered in Milan—it is one of Italy’s oldest pharmaceutical companies. Since its founding, the Group has continuously expanded and evolved into a leading international pharmaceutical group, listing on the Italian Stock Exchange in 1984. Today, it employs over 4,600 people and focuses primarily on researching and developing novel drug entities for cardiovascular and urogenital disorders, as well as therapies for rare diseases. Recordati’s growth stems from the quality of its products and services, and from its strategic emphasis on business development and acquisitions—pursuing internationalization and diversification. Beyond subsidiaries in Western and Central/Eastern Europe, Recordati operates directly in the United States, Canada, Mexico, several South American countries, the Middle East, Japan, Australia, New Zealand, China, South Korea, Turkey, and North Africa. The Group currently owns seven pharmaceutical manufacturing plants and one dedicated packaging and distribution facility for rare-disease drugs, as well as two chemical-pharmaceutical plants producing multiple active pharmaceutical ingredients (APIs) and intermediates. Recordati conducts its rare-disease business globally through Recordati Rare Diseases, covering over 100 countries. Recordati Rare Diseases is a fully dedicated business unit focused on the research, development, and commercialization of therapies for rare diseases. Its product portfolio initially centered on rare inherited metabolic disorders. Its position was strengthened through licensing agreements with Novartis for three endocrinology drugs: Isturisa (osilodrostat), Signifor (pasireotide), and the long-acting formulation Signifor LAR (pasireotide pamoate). In 2022, Recordati acquired EUSA Pharma—a global biopharmaceutical company specializing in rare and orphan oncology indications—adding four high-potential products to its rare and orphan oncology portfolio.

CVC, GBL Hold 74.3% of Italian Drugmaker Recordati at End of Takeover Offer Period

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CVC and GBL secured a 74.3% stake in Italian pharmaceutical firm Recordati via a €53-a-share bid valued at €11 billion, exceeding their minimum acceptance threshold. They remain short of the 90% delisting level and plan to reopen the offer in early November.

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CVC, GBL Hold 74.3% of Italian Drugmaker Recordati at End of Takeover Offer Period

CVC, GBL Hold 74.3% of Italian Drugmaker Recordati at End of Takeover Offer Period

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