BioTelemetry acquired by Philips: fairness opinion by Raymond James
Deal terms
Implied value per share by method vs. $72.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Raymond James to the target board
Discounted cash flow assumptions
Unlevered free cash flows defined as cash flows from operations less capital expenditures plus interest expense; standalone basis
Selected public companies (17)
Boston Scientific Corporation · ResMed Inc. · Teladoc Health, Inc. · Laboratory Corporation of America Holdings · Quest Diagnostics Incorporated · Masimo Corporation · PRA Health Sciences, Inc. · Syneos Health, Inc. · Hill-Rom Holdings, Inc. · iRhythm Technologies, Inc. · Medpace Holdings, Inc. · AtriCure, Inc. · Globus Medical, Inc. · Integra LifeSciences Holdings Corporation · CONMED Corporation · NuVasive, Inc. · LeMaitre Vascular, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / CY2020E EBITDA (Industry Reference Companies) | 15.7x | 18.4x | 25.1x | 15.7x–25.1x | $47.71–$77.46 |
| EV / CY2021E EBITDA (Industry Reference Companies) | 12.9x | 15.1x | 22.2x | 12.9x–22.2x | $48.86–$85.38 |
| EV / CY2020E EBITDA (Financial Profile Reference Companies) | 18.5x | 22.6x | 26.0x | 18.5x–26.0x | $56.51–$80.41 |
| EV / CY2021E EBITDA (Financial Profile Reference Companies) | 14.5x | 19.2x | 22.1x | 14.5x–22.1x | $55.44–$85.24 |
Selected precedent transactions (22)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2020-10 | Livongo Health, Inc. | Teladoc Health, Inc. | — |
| 2019-10 | Medidata Solutions, Inc. | Dassault Systemes Americas Corp. | — |
| 2019-04 | CAS Medical Systems, Inc. | Edwards Lifesciences Corporation | — |
| 2019-02 | athenahealth, Inc. | Veritas Capital Fund Management, L.L.C. | — |
| 2019-02 | Technology business of MModal IP LLC | 3M Company | — |
| 2018-11 | MatrixCare, Inc. | ResMed Inc. | — |
| 2018-10 | Envision Healthcare Corporation | KKR & Co. Inc. | — |
| 2018-05 | Advance Medical Health Care Management S.A. | Teladoc Health, Inc. | — |
| 2017-09 | PAREXEL | Pamplona Capital Management LLP | — |
| 2017-08 | Chiltern International Limited | Covance Inc. | — |
| 2017-08 | inVentiv Health | INC Research Holdings | — |
| 2017-07 | Best Doctors, Inc. | Teladoc Health, Inc. | — |
| 2017-06 | LifeWatch AG | BioTelemetry | — |
| 2017-01 | St. Jude Medical, Inc. | Abbott Laboratories | — |
| 2020-11 | Wright Medical Group N.V. | Stryker Corporation | — |
| 2019-10 | Acelity, Inc. | 3M Company | — |
| 2019-02 | DJO Global, Inc. | Colfax Corporation | — |
| 2018-02 | Exactech, Inc. | TPG Capital, L.P. | — |
| 2018-01 | Argon Medical Devices Holdings, Inc. | Weigao International Medical | — |
| 2017-10 | J&J's Codman Neurosurgery Business | Integra LifeSciences Holdings | — |
| 2017-04 | BSN Medical Luxembourg Group Holding | Svenska Cellulosa Aktiebolaget | — |
| 2017-03 | Cynosure, Inc. | Hologic, Inc. | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM EBITDA (Industry Reference Transactions) | 14.5x | 17.1x | 23.6x | 14.5x–23.6x | $45.36–$74.94 |
| EV / LTM EBITDA (Financial Profile Reference Transactions) | 12.3x | 14.4x | 22.2x | 12.3x–22.2x | $38.09–$70.26 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Transaction Premium Analysis | 64 M&A transactions closed since January 1, 2018 with target market cap $1.0-$5.0 billion, 100% acquired, US/Canada targets. Mean premiums 27.8% (1-day), 27.5% (1-week), 31.7% (1-month); medians 19.2%/20.3%/26.9%; min 5.6%/7.7%/3.0%; max 73.6%/77.0%/90.4%. Implied transaction premiums were 13.8% (1-day), 21.1% (1-week), 49.1% (1-month). Solely for informational purposes. | — |
| Trading Analysis | Compared $72.00 consideration to historical closing prices: December 16, 2020 close of $61.28 (17.5% premium) and 52-week high of $63.27 on December 15, 2020 (13.8% premium). Solely for informational purposes. | $61.28–$63.27 |
Filing section notes Raymond James had not been engaged by or received compensation from BioTelemetry in the preceding two years other than amounts under its engagement letter; served as financial advisor to a Philips subsidiary in the March 2019 sale of Photonics GmbH to TRUMPF Group for a fee of approximately $1.5 million.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $528M | $598M | $682M | $786M | $917M | 14.8% |
| Revenue growth | 18.0% | 13.3% | 14.0% | 15.2% | 16.6% | |
| EBITDA | $147M | $181M | $214M | $254M | $303M | 19.9% |
| EBITDA growth | 24.6% | 23.1% | 18.5% | 18.3% | 19.6% | |
| EBITDA margin | 28% | 30% | 31% | 32% | 33% | |
| Implied EV / EBITDA | 19.0x | 15.5x | 13.1x | 11.0x | 9.2x |
Year-1 growth is against LTM at announcement ($447M revenue, $118M EBITDA); later years are year over year.
Raymond James relied on management's Projections covering calendar years 2020 through 2025 for its discounted cash flow analysis, using unlevered free cash flow (cash flow from operations less capex plus interest expense) with calendar 2025 as the terminal year. Selected company multiples were applied to BioTelemetry's projected CY2020E and CY2021E adjusted EBITDA (adjusted to add back stock-based compensation, D&A and one-time charges); the $72.00 consideration implied 23.4x CY20E and 18.8x CY21E EBITDA and 22.7x LTM EBITDA. Specific revenue and EBITDA dollar figures were not disclosed in the sliced sections.
Process notes
Other Outsourced Services fairness opinions
- Sharps Compliance / Aurora Capital Partners 2022 · 25.2x EV/EBITDA
- CynergisTek / Clearwater Compliance 2022
- Landauer / Fortive 2017 · 18.2x EV/EBITDA
- Advisory Board Healthcare / Optum 2017 · 10.3x EV/EBITDA
- R1 RCM / TowerBrook and CD&R 2024 · 13.6x EV/EBITDA
- Stericycle / Waste Management 2024 · 15.1x EV/EBITDA