Cord blood and tissue banking is the collection and preservation of the valuable cells within the umbilical cord of a newborn for future medical use. For both therapeutic and financial reasons, the cord blood industry has been witnessing record levels of M&A activity in recent years. Today, more than 70% of the global cord blood market is controlled by the world’s 12 largest cord blood banking operators.
In particular, cord blood industry consolidation has been pronounced within the U.S, Europe, Asia, and Latin America, with:
- Generate Life Sciences aggregating reproductive, newborn stem cell, and genetic services across the U.S., Canada, and Australia. (Generate joined CooperSurgical, a global leader in women’s health and fertility in November 2021.)
- Cryoholdco aggregating stem cell banking assets within Latin America
- Sanpower Group dominating the Asian market
- Two leading cord blood brands (PBKM FamiCord and Vita34) consolidating the majority of the European market through aggressive M&A activity (and Cryo-Save AG going bankrupt)
India is another critical market that has surged in importance in recent years. This is because the country now boasts an astounding population of 1.4 billion, placing it head-to-head with China as the world’s most populous country. This means that an incredible one-third (36%) of the world’s 7.8 billion people live within India or China. Within India, LifeCell International is the market leader, with approximately 320,000 stem cell units in storage. Within China, Global Cord Blood Corporation (GCBC) controls the market share and is the only operator with multiple provincial licenses.
Within the United States, Generate Life Sciences controls Cord Blood Registry and its associated 900,000+ cord blood and tissue units in storage, as well as Natera’s Evercord™ cord blood and tissue banking business. It also owns cord blood banking assets in Australia (Cell Care) and Canada (Insception Lifebank and Cells for Life).
Generate Life Sciences is a portfolio company of the private equity firm, GI Partners. In November 2021, Generate Life Sciences entered an agreement with CooperCompanies (NYSE: COO) to become part of CooperSurgical, a global leader in women’s health and fertility solutions.
Within Australia, the largest cord blood bank, CellCare, had CPE Capital (CPEC) as its the majority investor for several years, but is now owned by Generate Life Sciences.
Within Asia, Sanpower Group is the dominant investment force. Headquartered in Nanjing, it is one of the largest private conglomerates in China, with investments across healthcare, retail and financial services. It has preserved over 900,000 cord blood samples in mainland China, and it has over 1.2 million units preserved when its Cordlife reserves within Southeast Asian countries are included. This positions Sanpower Group and its subsidiary Nanjing Cenbest as the largest cord blood banking operator within China and Southeast Asia.
Similar market consolidation and operational efficiency has been pursued within Europe, where the number of cord blood banks has dropped by more than one-third over the past decade, from approximately 150 to less than 100. The industry leaders in the European market include FamiCord Group, who has executed over a dozen M&A transactions in recent years, and Vita34, who has executed a half dozen. Stemlab, the largest cord blood bank in Portugal, also executed three acquisition deals prior to being acquired by FamiCord in August 2018 for $16.5 million. FamiCord is now the leading stem cell bank in Europe and one of the largest worldwide. FamiCord is controlled by Enterprise Investors.
For many years, CryoSave AG was a large cord blood banking operator who controlled several centralized processing facilities in Europe, India, and South Africa. It also operated numerous regional facilities through licensing agreements. But, in mid-2019, it entered the bankruptcy process and filed for liquidation. The brand name “CryoSave” and its client database (i.e., its storage contracts and sales database) were acquired by the company, CSG-BIO. Today, Cryo-Save’s umbilical cord blood units are stored by the Polish cord blood bank PBKM, part of the FamiCord network.
Within Latin America, ACON Investments is the major regional investor. It owns Cryoholdco as a portfolio company, which controls at least nine cord blood and dental pulp assets across the region and their associated 275,000 stem cell units in storage. Headquartered in Washington, DC, ACON Investments is a U.S. based investment fund that manages over $5.3 billion in assets.
Clearly, investor appetite for cord blood banks has never been stronger. This is because cord blood banks produce stable subscription revenue from long-term storage contracts. At a fundamental level, cord blood banks are both a real estate play (cryogenic storage facilities) and a regenerative medicine (RM) play.