Healthcare & Life Sciences Industry Overview

Medical Plastics And Packaging: Convergence Creates Opportunity

Both the plastics and packaging and the medical sectors are experiencing thriving M&A environments, spurred by investor interest in each sector’s unique strengths and their common trait of steady, recession-resistant demand. When two such attractive sectors intersect, it creates substantial opportunities.

In this article, senior bankers from Harris Williams’ Industrials and Healthcare and Life Sciences (HCLS) Groups share their perspectives on what’s putting medical plastics and packaging on the radar for so many strategic buyers and investors.

M&A Environment

There have been roughly ~550 M&A transactions in the healthcare & life sciences (HCLS) industry since the beginning of 2018, worth roughly $174.9 billion, compared to $239.8 billion for all of 2017. Of these deals, ~165 were executed by private equity groups.

Notable transactions include the acquisition of Premise by OMERS Private Equity, AMPAC Fine Chemicals by Cardinal Health and CD&R, and LifePoint Health by Apollo and RCCH Health Partners.

Public Company Performance

Stock prices grew slightly for many HCLS companies during the past three months, higher than the value of the S&P 500 over the same period.  In fact, the Harris Williams HCLS Composite Index grew 9.2%, while the S&P grew only 6.4%. Notable exceptions to this trend include physician practice management (decreased 6.8%), disease management (decreased 6.3%), specialty pharmacy (decreased 4.6%), and medical / surgical / dental supplies and distribution (decreased 2.6%).

Over the past 12 months industry-wide growth looks much stronger, with the HCLS Composite Index achieving a 14.9% increase. At the category level, provider-based services stock prices grew by 31.7% over the past 12 months, followed by payor, provider and pharmacy support services at 20.9% and products and devices at 9.0%. Specific stock price growth leaders over the past year include home care, hospice, and home infusion (67.2%), surgicenters / rehabilitation (59.2%), diagnostic imaging (46.4%), and long-term care (35.9%).

Industry News

Substituting 29 of the most expensive brand-name combination drugs could have saved Medicare almost $1 billion in 2016, according to a new study published by JAMA. Physicians could vastly improve their referrals if providers shared insurance, quality, location, and specialization data with peers in their network. Physicians do not currently have adequate data to best use their referral networks, according to a new survey from Kyruus. Private equity firm Apollo has acquired LifePoint Health, which will create a company that operates 84 hospitals across 30 states once it is combined with RCCH HealthCare Partners.

M&A Overview1

Announced Healthcare & Life Sciences M&A


Healthcare & Life Sciences M&A Trends


Announced Private Equity M&A Activity


Debt Markets Overview

Key Credit Statistics3


Select Healthcare & Life Sciences Debt Offerings4

(by deal amount)


Public Markets Overview1

Key Trading Statistics

(detail begins on page 9)


Public Company Sector Performance

(12-month % change in stock price)


Equity Markets Overview

Healthcare & Life Sciences Industry Stock Performance1


Top Equity Offerings2

(by proceeds)


M&A Transactions

Announced U.S. Healthcare & Life Sciences M&A1



What We’ve Been Reading

Pharma | Swapping Brand-Name Combo Drugs For Generics Could Save Medicare $1B A Year

Combination drugs ideally reduce the number of pills a patient has to take and improve adherence. But that doesn't happen if branded drugs are prohibitively expensive. Substituting 29 of the most expensive brand-name combination drugs with generic alternatives could have saved Medicare $925 million in 2016, according to a new study published by JAMA. The study also calls into question drugs that are nearly identical to existing medications and claims the financial harm of these drugs far outweighs the value they offer.

Read the article.

Providers| Lack Of Provider Data, Scheduling Options, Impedes Care Coordination

Physicians do not have the data to best use their referral network, which can hurt outcomes and damage the patient experience, according to a new survey from Kyruus.  Physicians often refer patients to a small network of their favorites yet often do not know whether the physicians have changed hospitals or are out of network, which can result in surprise medical bills for patients. According to the Kyruus survey this dynamic can be resolved if providers share insurance, quality, location and specialization data with peers in their network.

Read the article.

M&A | LifePoint Acquired By Apollo For $5.6B

Private equity firm Apollo has completed the acquisition of LifePoint Health, a Tennessee-based hospital system, for $5.6 billion. Apollo plans to merge the Company with RCCH HealthCare Partners, creating a combined company that will operate 84 hospitals across 30 states. The deal comes at a time when LifePoint is struggling financially, reporting a net loss in Q1 2018 and divesting hospitals to help pay off its debt. 

Read the article.

Public Comparables

Payor, Provider, & Pharmacy Support Services1


*KKR & Co. reached an agreement on June 11th, 2018 to acquire Envision Healthcare for $46.0 per share, in a deal expected to close later in 2018.



*40% of Rite Aid’s stores were acquired by Walgreens in a $4.4 billion transaction completed on March 5, 2018. The remainder of stores were to be acquired by Albertson’s until the deal fell through on August 8, 2018.

Products & Devices1



Provider-Based Services1


*DaVita Medical Group to be acquired by UnitedHealth in a $4.9 billion deal announced on December 6th, 2017.


* Figures are adjusted for minority interest.

1. FactSet

2. Company Filings

3. S&P

4. PNC Debt Capital Markets


The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.


Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.