Cord Blood Registry® (CBR) recently made headlines by announcing that it had entered into a definitive agreement to be acquired by AMAG Pharmaceuticals for $700M. While the announcement was new, there were aspects of the deal that seemed eerily familiar.
Similarities Between AMAG Pharma’s Acquisition of CBR® and PerkinElmer’s Acquisition of ViaCord
Three aspects of AMAG Pharmaceutical’s acquisition of Cord Blood Registry (CBR) were strangely reminiscent of the deal in which PerkinElmer acquired the cord blood bank ViaCord in 2007.
1. CBR® Acquired by AMAG Pharma for Same Multiple on Revenue as PerkinElmer Paid for ViaCord
On June 29, 2015, the largest cord blood bank in the United States and the world, Cord Blood Registry® (CBR®) announced that it had entered into a definitive agreement to be acquired by AMAG Pharmaceuticals, a company based out of Based in Waltham, Massachusetts. The value of the deal was set at $700 million, which established value of over 5.55 times revenue and over 15.55 times EBITDA.
Interestingly, the second largest cord blood bank in the United States, ViaCord, was also acquired by an industry behemoth, although eight years prior in October of 2007. More specifically, PerkinElmer bought ViaCell, Inc., a company focused on the development of new therapies from stem cells. That purchase included the blood banking division of ViaCell, called ViaCord. Because the price of that deal was $300 million, it had the same multiple of 5.55 times revenue that occurred during the recent sale of Cord Blood Registry® to AMAG Pharmaceuticals.
Having repeated itself within two different deal-making environments, this multiple on revenue may be acquiring a degree of significance within the industry.
2. Same Location of Acquiring Company
Another eerie similarity between the two deals is that Cord Blood Registry® was acquired by AMAG Pharmaceuticals, based out of Waltham, Massachusetts. ViaCord had previously been acquired by PerkinElmer, also based out of Waltham, Massachusetts.
Specifically, Perkin Elmer has its Corporate Headquarters at 940 Winter Street, in Waltham, MA, while AMAG Pharmaceuticals has its Executive Offices at 1100 Winter Street, in Waltham, MA. This puts the companies just a stone’s throw away at 1.3 miles apart from each other.
While this suburb of Boston is a hub of life science activity, it is a strange coincidence that both acquiring companies are based not only from the same country, state, city, and suburb, but literally on the same street.
3. Two Largest Cord Blood Banks within the U.S.
Finally, the acquisitions were for the 1st and 2nd largest cord blood banks within the United States.
Certainly, it is true that large cord blood banks make better targets for acquisition by multi-national companies than smaller companies, because acquisition targets need to be large enough to be able to have a measurable impact on the acquiring company’s performance. However, these acquisitions were not for the 3rd or 4th largest companies, but for the two largest, most dominant cord blood banks within the United States.
To summarize the findings in this post, a comparison of similarities and differences between these two deals is shown below.