Cord Blood Banking Market Consolidation

Cord Blood Industry Consolidation in the U.S.

Growing numbers of investors are now entering the marketplace, with M&A activity accelerating in the U.S. and abroad. In the United States, AMAG Pharmaceuticals announced June 15th that it is selling Cord Blood Registry (CBR) to GI partners for $530 million, after buying CBR for $700 million in 2015 (a $170 million dollar loss).

GI Partners Acquisition of Medical Banking Services

GI Partners, a private equity investment firm, decided to simultaneously acquire CBR and California Cryobank (CCB), world’s premier donor sperm and egg bank. Its strategy is to build value in both businesses by merging them into a single entity that will be the global leader in stem cell storage and reproductive tissue services.

Cryo-Cell Shifting from Private Storage

On June 4, 2018, another large U.S. cord blood bank, Cryo-Cell International, announced that it was acquiring a hybrid public-private cord blood bank for $14 million (CORD:USE). As a result of the transaction, Cryo-Cell is entering the public banking sector.

Cryo-Cell’s co-CEO, David Portnoy, stated that he expects the acquisition to have the potential to “increase revenues by approximately 20%,” a bold statement for a single acquisition.

Other Acquisitions in the Cord Blood Banking Industry

Additionally, mid-sized cord blood banks within the U.S. have been rapidly acquiring smaller industry players to achieve inorganic growth. Examples of this trend include:

• AlphaCord acquired LifeSource Cryobank in November 2015 (its 5th acquisition of smaller banks)
• FamilyCord acquired Southern Cord in April 2016 and the assets of Cord Blood America, Inc. in February 2018

After the “big three” cord blood banks in the U.S. (CBR, Cryo-Cell, and ViaCord), FamilyCord is another dominant market player, with nearly 100,000 units in storage.