On June 4, 2018, Cryo-Cell International announced it will be acquiring the hybrid public-private cord blood bank CORD:USE for $14 million. The acquisition’s purposes are to strengthen its cord blood banking services by entering the public cord blood sector and to solidify its role as an industry leader. Learn about the combined commercial entity of Cryo-Cell CORD:USE below.
Cryo-Cell CORD:USE | The Acquisition of CORD:USE
In this article:
- Terms of the Cryo-Cell International and CORD:USE Deal
- A Short Background On Cryo-Cell
- About CORD:USE
- U.S. Cord Blood Market Leaders
- GI Partners’s Acquisition of CBR and CCB
Terms of the Cryo-Cell International and CORD:USE Deal
To acquire substantially all of the assets of CORD:USE Cord Blood Bank, Inc., Cryo-Cell is paying $14 million, split between $10.5 million in cash and the issuance of 470K shares of Cryo-Cell stock.
According to Cryo-Cell’s press announcement, the deal could also be worth “up to $200 million in potential cash earnouts related to the CORD:USE public cord blood inventory and additional stock earnouts based upon Cryo-Cell achieving certain milestones associated with the purchased assets.”
As a result of this transaction, Cryo-Cell is entering the public banking sector because CORD:USE is one of only three hybrid banks in the United States to offer both private and public cord blood banking storage services.
In reference to this transaction, Cryo-Cell’s co-CEO, David Portnoy, stated that he expects the acquisition to “increase revenues by approximately 20%,” a bold statement for a single acquisition. He also added, “CORD:USE has an outstanding reputation in the medical and scientific community which we look forward to building upon together with their team.”
Edward S. Guindi M.D., CORD:USE president and CEO, said that he was very pleased to join forces with Cryo-Cell. “We believe the scientific evidence clearly supports that Cryo-Cell International’s proprietary method of processing cord blood, Prepacyte, is the best processing method,” he stated.
He also believed that with both companies’ procedures and advanced technologies, they will continuously provide cord blood banking services of the highest quality. “… we have the opportunity to help many in need of high-quality stem cell therapies now and in the future,” Guindi concluded.
The Cryo-Cell CORD:USE deal represents one of many cord blood industry consolidation events and is part of a larger trend occuring within the United States and worldwide.
A Short Background On Cryo-Cell
Cryo-Cell was founded in 1989 and was the first private cord blood bank in the world. The company’s mission is to offer their clients the state-of-the-art services of stem cell cryopreservation and to support advancements in regenerative medicine.
The company is also licensed in states that require licensure, is cGMP-/cGTP-compliant, and is FDA-registered. Cryo-Cell International is the first cord blood bank company to receive FACT accreditation. This is for meeting the standards as the most stringent cord blood quality that’s recognized by an international independent accrediting organization.
CORD:USE Cord Blood Bank, Inc., is based in Orlando, Florida, and is a leading operator of high-quality family and public cord blood banks. The company made agreements with hospitals in the country to ask mothers to donate their baby’s cord blood.
Their public cord blood bank was, in fact, chosen to aid in building the National Cord Blood Inventory. The company’s family cord blood bank also promises clients high-quality cord blood banking services.
U.S. Cord Blood Market Leaders
One of the three largest U.S. cord blood banking companies, Cryo-Cell International was the first company to privately store cord blood stem cells in 1992. A global brand, Cryo-Cell now has over 500,000 stem cell units in storage across its member banks in 87 countries.
The other two dominant market competitors within the U.S. cord blood banking market are Cord Blood Registry, recently sold by AMAG Pharmaceuticals to GI Partners for $530 million, and ViaCord, owned by parent company PerkinElmer.
GI Partners’s Acquisition of CBR and CCB
GI Partners, a private equity investment firm, announced only days after the Cryo-Cell CORD:USE merger that it would be simultaneously acquiring CBR and California Cryobank (CCB) to merge the companies into a single entity that will be a leader in stem cell storage and reproductive tissue services. The combined company will serve almost 600,000 families across more than 30 countries. Services offered will include fertility preservation storage, frozen donor sperm and egg, cord blood and tissue collection and storage services.
“As a combined entity with GI Partners’ support, we are well-positioned to continue our mission of helping grow and protect healthy families around the world,” Richard Jennings, CEO of CCB.
GI Partners Managing Director Dave Kreter also said, “Their combination represents a unique opportunity to create a new platform better positioned to further expand their industry-leading capabilities. We are excited to collaborate with management to extend the combined company’s capabilities internationally and make critical investments to support its next phase of growth.”
Howard Park, also a managing director at GI Partners, added that the combination of the two businesses will serve as a “one-stop shop” for clients’ needs in stem cell and reproductive storage. He concluded that he is looking forward to work with Jenning’s team to further improve the growth of the joint business.
For more info about the Cryo-Cell and CORD:USE deal, view the following:
To access market insights for the cord blood industry, view BioInformant’s Global Cord Blood Industry Report:
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