CHAMP Private Equity is acquiring Cell Care, the largest cord blood bank within Australia, according to news released October 10, 2018, by the Australian Financial Review (AFR). According to AFR, “It is understood CHAMP will take a controlling stake in the business, while some of the vending shareholders will retain a minority shareholding.”
The transaction has important implications for the global stem cell banking marketplace, because the AFR estimates the deal to have a price tag of more than $100 million.
With this price tag, Cell Care will be well capitalized to continue its research into therapeutic applications of cord blood and tissue stem cells and may be positioned to expand into new markets beyond Australia and Canada.
As stated by the AFR, “Cell Care is a top-10 player in cord blood globally, with its blood and stem cells used worldwide in more than 40,000 medical procedures and predominantly to treat childhood leukaemia.”
CellCare and Insception Lifebank
In October 2016, BioInformant previously reported that Cell Care acquired the largest cord blood bank in Canada, Insception Lifebank. The merger of Cell Care and Insception Lifebank was a powerful alliance, because it created one of the ten largest cord blood banks worldwide with more than 100K cord blood and tissue units in storage.
It also positioned the companies to continue collaborative clinical trial and R&D activity.
The deal between Cell Care and Insception Lifebank was historic, because it was one of the first cross-continental acquisitions to occur within the cord blood banking industry. Prior to that time, industry consolidation was happening within specific regions of the world.
Global Cord Blood Industry Consolidation
This acquisition of Cell Care by CHAMP Private Equity is part of a larger trend occurring within the cord blood banking industry, which is the trend of industry consolidation. In addition to larger cord blood banks acquiring smaller cord blood banks, holding companies have also been emerging within the global cord blood industry, most notably Cryoholdco within Latin America and Sanpower Group within Asia.
Additionally, private equity groups are increasing their interest in the sector.
In June 2018, GI Partners acquired the largest private cord blood bank in the United States, Cord Blood Registry (CBR), for $530 million. GI Partners, a private equity investment firm, bought CBR to pair it with California Cryobank (CCB), world’s premier donor sperm and egg bank. In doing so, GI Partners created a single entity that will be the global leader in stem cell storage and reproductive tissue services.
CHAMP Private Equity Group
Founded in 1987, CHAMP Private Equity is headquartered in Sydney, NSW, Australia. The company also has an office in Singapore, allowing it to “focus on Australia’s closest trading partners in Southeast Asia” and positioning it to “accelerate portfolio company groups outside of Asia.”
With this approach being a central strategy for CHAMP Private Equity, it will be interesting to see how it plans to introduce Cell Care to new markets beyond Australia and Canada.
According to its company profile: “The CHAMP Group is one of Australia’s most experienced private equity managers having first raised institutional capital more than 30 years ago. Since that time CHAMP has made more than 90 investments and deployed more than $3.5 billion in equity capital.”
Interestingly, the CHAMP has not traditionally focused on healthcare assets and this is its first acquisition within the cord blood banking industry.
To learn more about the recent acquisition of Cell Care by CHAMP Private Equity, read the news article by the AFR: CHAMP Private Equity buys Australian cord blood company
What do you think about this acquisition of Cell Care by a private equity group? What implications does it has for the larger cord blood banking marketplace? Share your thoughts in the comments.