AMAG Pharmaceuticals announced it is selling Cord Blood Registry (CBR), the largest private cord blood bank in the U.S., to GI Partners for a price tag of $530 million. This is $170 million less than AMAG Pharmaceuticals paid to acquire CBR as an asset in mid-2015, three years ago.
GI Partners, a private equity investment firm, is simultaneously acquiring CBR and California Cryobank (CCB), world’s premier donor sperm and egg bank, to merge the companies into a single entity that will be the global leader in stem cell storage and reproductive tissue services.
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AMAG’s Ownership of Cord Blood Registry (CBR)
At the time that AMAG Pharmaceuticals acquired CBR, it pursued the deal as a strategy to bolster its portfolio of maternal health products. Because CBR had powerful digital networks and a sales team with wide reach into hospitals and labor units, AMAG pursued the deal to expand its reach of into prenatal and maternal health markets.
During the time AMAG has owned CBR as an asset, it has changed its strategic focus, stating: “The transaction allows us to focus squarely on investing in and growing AMAG’s current pharmaceutical products, as well as continuing to expand the portfolio through additional product acquisitions or licenses.”
This deal by AMAG Pharmaceuticals to sell CBR to GI Partners has been unanimously approved by AMAG’s Board of Directors. As stated in AMAG’s press announcement, “AMAG intends to use the majority of the transaction proceeds to pay off the remaining $475 million of principal of its 7.875% Senior Notes due 2023.”
Combining Cord Blood and Tissue with Reproductive Services
GI Partners is acquiring Cord Blood Registry as part of an accelerating trend within the global cord blood industry. The trend is pairing cord blood and tissue storage services with reproductive services in an approach that seeks to extend the relationship with the mother.
GI Partners will combine California Cryobank (CCB), a large donor sperm and egg bank, and Cord Blood Registry (CBR), the largest stem cell storage company in the United States, into a single business that will provide complimentary services to a growing client base.
The combined company will serve nearly 600,000 families, a reflection of the 75,000 families served by California Cryobank’s donor sperm and donor egg banks and the families served by CBR, which has over 700,000 cord blood and tissue units in storage.
As stated by California Cryobank COO Pamela Richardson, “We are bringing together the leaders in two complementary, family-focused industries.”
Cord Blood Industry Consolidation
Since 2012, the cord blood and tissue industry has been undergoing aggressive consolidation. One major event was the acquisition of the largest cord blood in the U.S., Cord Blood Registry (CBR), by AMAG Pharmaceuticals for $700M in March 2015. Previously, ViaCord had been acquired by the multinational company PerkinElmer in October 2007 for $300M.
Other consolidation events within the U.S. cord blood industry include:
- Cryo-Cell’s acquisition of the hybrid (public-private) cord blood bank CORD:USE in June 2018
- AlphaCord’s acquisition of LifeSource Cryobank in November 2015 (its 5th acquisition of smaller banks)
- FamilyCord’s acquisition of Southern Cord in April 2016
- FamilyCord’s acquisition of the assets of Cord Blood America, Inc. in February 2018
Cord Blood Industry Inorganic Growth
Worldwide, there have been dozens of other cord blood industry transactions. In Europe, the market leaders FamiCord and Vita34 are heavily pursuing inorganic growth. These two European leaders have each executed 5+ merger and acquisition (M&A) deals. Headquartered in Switzerland, Stemlab has also done three deals.
Similarly, Sanpower Group is consolidating the industry in Asia, stating on its website: ”
“Sanpower Group and its subsidiary Nanjing Cenbest…have reserved over 900,000 cord blood samples at home, and the associated reserves amount to almost 1,200,000 when counting in the Cordlife reserves across quite a few Southeast Asian countries and regions. This means that Nanjing Cenbest has emerged as the world’s largest cord blood banking operator.”
In Latin America, Cryoholdco is a cord blood bank holding company that was formed in 2015 and will control nearly 200,000 stem cell units by the end of 2018.
Cryoholdco now owns assets in:
- Mexico – Cryo-Cell Mexico, BCU, BSCU, DentCell
- Columbia – Stem Medicina Regenerativa, Redcord
- Peru – Criocord
Cryoholdco is continuing to pursue new deals across Latin America, because its strategy supports cost and process efficiencies.
Clearly, this trend of cord blood industry consolidation is accelerating in major markets worldwide.
Cord Blood Market Overview
To learn more about this cord blood industry transaction, view the following announcements:
- AMAG Pharmaceuticals: AMAG Pharmaceuticals Announces Divestiture of Cord Blood Registry®
- California Cryobank: California Cryobank And Cord Blood Registry To Be Combined By GI Partners To Create A Leading Life Sciences Platform
- GI Partners: GI Partners to Acquire and Simultaneously Combine Cord Blood Registry and California Cryobank
To learn more about the industry, view the “Global Cord Blood Industry Report.”
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