The past few years have seen increasing investments made within the cord blood banking market, both by private equity and venture capital firms. These investments show the strength of the cord blood banking market. A summary of these investors is shown below.
There have also been significant acquisitions made within the cord blood industry, with the largest cord blood bank within the United States, Cord Blood Registry, recently acquired by AMAG Pharmaceuticals in June of 2015 for $700 million. The purchase valued Cord Blood Registry at over 5.55 times revenue and over 15.55 times EBITDA.
The acquisition of CBR was a strategic move to bolster its portfolio of existing maternal health products. CBR also brings with it an established network of digital and social networks through which it communicates with pregnant women, as well as a sales team that serves obstetricians, hospitals, and labor units throughout the United States. These networks may help AMAG Pharmaceuticals expand its reach of within prenatal and maternal health markets.
The second largest cord blood bank within the United States, ViaCord, was previously acquired by PerkinElmer, Inc., in October of 2007 for $300 million. More specifically, PerkinElmer bought ViaCell, Inc., a company focused on the development of new therapies from stem cells, and the purchase included the blood banking division of the company, ViaCord.
Interestingly, ViaCell was acquired by PerkinElmer for 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 have a degree of significance within the industry. A comparison of these two major cord blood industry acquisitions is shown below.
Related Cord Blood Investments, Including Parent Companies and Billionaire Founders
As mentioned above, Cord Blood Registry was bought for $700 million in June of 2015 by AMAG Pharmaceuticals, a company based in Waltham, Massachusetts, that offers a range of products for maternal health and hematology.
Similarly ViaCord is backed by its parent company PerkinElmer, Inc., which creates more than $2.2 billion dollars in annual revenue. With that behemoth as its parent organization, ViaCord also has substantial protection against volatility that could occur within the cord blood market. PerkinElmer paid $300 million for ViaCell, Inc., in October of 2007, of which ViaCord is the company’s newborn cell banking division.
In addition, the CEO of Americord Registry, Martin Smithmyer, announced in an 8th of July 2015 press release that the company is receptive to “future strategic and growth financing options” that would assist its aggressive growth strategy.[5] It is possible that the industry will see an acquisition or an investment into this company in the near future, because it is one of the fastest growing cord blood banks in the world and its leadership has demonstrated through words and actions a commitment to pursuing rapid growth.
Finally, while the billionaire Richard Branson put his name and branding power behind the Virgin Health Bank in the UK, he did not invest any money in the deal. Instead, the company was largely funded by the private equity firm Excalibur and the biotech entrepreneur Christopher Evans, with an ownership stake of 65 percent.
While the UK branch was founded in 2007 by Branson and Evans, it had by 2009 changed its name and relocated its headquarters to Doha, Qatar, as part of a new partnership with the Qatar Science & Technology Park. Most recently, the position owned by Excalibur was bought out by Qatar investors in 2014, allowing Excalibur to get some return on their £8 million investment.
To learn more, view the “Complete 2015-16 Global Cord Blood Banking Industry Report.”
Footnotes
[1] Thefreelibrary.com, (2015). Cord Blood Registry Receives $18 Million Investment. – Free Online Library. [online] Available at: http://www.thefreelibrary.com/Cord+Blood+Registry+Receives+$18+Million+Investment.-a092844307 [Accessed Nov 6, 2014].
[2] M., Sands, A., Sands, A. and Sands, A. (2014). Signs of validation for investors in cord blood banking – the industry consolidation – Total Biopharma : Total Biopharma. [online] Totalbiopharma.com. Available at: http://www.totalbiopharma.com/2013/06/11/signs-validation-investors-cord-blood-banking-industry-consolidation/ [Accessed 4 Nov. 2014].
[3] SynGen, Inc., (2014). SynGen, Inc. Secures Additional Financing From Bay City Capital – SynGen, Inc.. [online] Available at: http://syngeninc.com/syngen-inc-secures-additional-financing-bay-city-capital/ [Accessed 4 Nov. 2014].
[4] Ibid.
[5] Sacramento Business Journal,. ‘Regenerative Medicine Company Syngen Raises $2.3M In A Private Offering – Sacramento Business Journal’. N.p., 2015. Web. 8 July 2015.
[6] Investors Hub, (2014). Cord Blood America Inc. CBAI Post # 87083. [online] Available at: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=85434933 [Accessed 4 Nov. 2014].
[7] Gtcr.com, (2014). About Us – The Leaders Strategy – Chicago Based Private Equity Firm – GTCR Golder Rauner. [online] Available at: http://www.gtcr.com/about-us/ [Accessed 6 Nov. 2014].
[8] GTCR, LLC, (2014). Portfolio Companies: Cord Blood Registry. [online] Available at: http://www.gtcr.com/our-focus/healthcare/portfolio/cord-blood-registry/ [Accessed 7 Nov. 2014].
[9] MarketWatch, (2015). Americord Registry Considering Strategic Options. [online] Available at: http://www.marketwatch.com/story/americord-registry-considering-strategic-options-2015-07-08?reflink=MW_news_stmp. 2015. [Accessed 8 July 2015].