Life Sciences & Healthcare Newsletters

Kempen & Co European Life Sciences ECM update 

• Monthly update on Equity Capital Markets of European Life Sciences companies.
• Provides insights on market developments, financing transactions, share price developments and other relevant insights in the field of ECM.
• Example analysis from the July 2020 ECM update below.

European Life Sciences deal volume Jan-Jun 2019 & 2020 (€bn)

• ECM transactions started out with a bang in 2020 with the first two months of deal value and volume tracking +133% and +67% above the same period in 2019, respectively
• This all came to a halt as the macroeconomic shock caused by the coronavirus resulted in a sharp decline in Y/Y deal value growth in April despite the number of transactions remaining flat
• Since, the recovery of equity markets permitted a substantial rebound in investor support in both May and June. Y/Y growth in total deal value and volume during the past two months combined bounced back substantially to +770% and +500%, respectively, vs. 2019

Note: Includes all IPOs, follow-ons, and convertible debt offerings over EUR 10m on regulated exchanges. Mar 2019 ABB of AstraZeneca has been excluded
Source: Dealogic and Kempen analyses; data per 30 June 2020

Kempen & Co European Life Sciences M&A update - September 2020

Are lower M&A premiums reflective of a buyer’s market?

Total deal value versus number of pending deals

• Buyers are increasingly careful in terms of acquisition premiums, reflected in a median 1-day bid premium down from 81% in H1 2018 to 31% YTD. Prices might be down, but buyers have remained active in life sciences, with 100 deals in 2020YTD compared to 96 in H2 2019. Especially July and August have been hot, with the number of deals increasing 36% compared to May and June

• Even in a buyer’s market high-quality companies continue to go for top dollar, with Nestle’s acquisition of US-based Aimunne boasting a bid premium of 174%, the highest in a life sciences M&A deal involving a European target/bidder since mid-2018

• On a similar note, investors remain patient in their wait for higher premiums, with Thermo Fisher’s bid for Qiagen being rejected by investors, even after an increase in the purchase price, up from EUR 39 per share (20% 1-day bid premium) to EUR 43 per share (35% 1-day bid premium)

Note: Includes transactions involving a European target, a European acquirer, or both; €25m minimum disclosed deal value; completion occurred after the announcement date; between 1 Jan 2018 and 31 Aug 2020. Sources: Company's press releases, Bloomberg, Mergermarket, and Kempen & Co analysis