16.00_conalliance_-_cliff_murphy.pdf

8/17/2019 16.00_conalliance_-_cliff_murphy.pdf

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Medtec UK

Exit strategies and

maximising valueCliff Murphy

Partner ~ ConAlliance UK

Interim CEO at NIGHTINGALE EOS

http://www.google.co.uk/url?sa=i&rct=j&q=contact+lens&source=images&cd=&cad=rja&docid=yRyhl_TFDC2RYM&tbnid=XInbUrju3M7i-M:&ved=0CAUQjRw&url=http://www.chalmersopticians.co.uk/new/nomobile/page1.php&ei=kSsJUdWkD5Ts0gXwioDQBg&bvm=bv.41642243,d.d2k&psig=AFQjCNEdrmG0bcRg7aHgI03tDBRasUOnNQ&ust=1359641866275342


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Presentation Overview

• Introduction & changing nature of healthcare

• What is value?

• A company lifecycle

• A buyer’s perspective ~ Trade sale

• Other exit strategies ~ IPO & Private Exit

• Top tips for value


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45%

30%

25%

Medical technology

Hospital care

Life Sciences

FOUNDED 2011

HEADQUARTERS Munich; Highlight Towers

OFFICES London, Hong Kong, (New York)

CONALLIANCE

TEAM

Currently 15 people:Experienced senior professionals from management consulting

firms, investment banks and healthcare companies with in-

depth insight into the life sciences markets, strong research

and clinical foundations.

INDUSTRY

SPECIALIZATION

Expertise is concentrated on a single sector:

the global healthcare industry

EXPERIENCE Proven track record of > 100 relevant M&A projects

CLIENTSOur clients are medium-to large-sized family-owned enterprises,divisions of multinational groups, leading private equity funds and

family offices.

40%

20%

5%

35%

Divestures

Analysis and research

Restructuring andfincance

Acquisitions

E x p e r t i s e

• Work

side

• Work

on the

techn

• Strate

techn

• Prepa

S e c t o r S p l i t


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Context…the changing world

Lower Tax revenu1) Less people c

2) Later stage pe

• Less VAT

• Less ‘chu

• Less driv

Impact on health

1) More demand2) Greater expe

3) Growing Pop.

4) Etc.

Impact of Nation


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Increased Demand for Medical TreatmeIn 2012 Medical Technology was the field withthe highest volume of patent applications in

Europe.

However, healthcare spending in

pressure. Austerity measures havexpenditure for medical technologies

effects are clearly visible since 2006.

Expenditure Trend: Medical Techno

Amount of investment compared to other sectors?


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• What is value?






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Beauty is in the eye of the beholder!


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Desire is based on perspective!

Global deal: prreimbursemen

globally as this

accessible mar

Regional deal:

right time

Space grab dea

healthcare play

market access


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Macro impact of healthcare system on medical technology stralso impact concept of value!

Value PropositionWhere to play…Treatment pat

Prevention,

health &

wellness

Diagnosis Intervention /

therapy

T

u

P r o p o s i t i o n : m e t h o d o l o g y /

t e c h n o l o g y

Med tech &

consumables

Data & Health

Informatics

Planning &

Management of

care

Care Delivery

Traditional Medtech territory

Example: Baxter Kidney Dialysis and Cancer tre


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• What is value?


• A buyer’s perspective ~ Trade Sale




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Life cycle overview

Risk

£

time

Company Revenues

Company Profits

IPOVC

PE

Friends &

family ~ Angel

Corporate Loans

There aof exitin

• Sale

• Liquid

Everyth


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Value Inflection points?

Concept PrototypeClinical

trials

Reg

approval

Early

commercial

Full

commercial

Grants, angels etc.

Venture Capital

Strategic investment

Private/growth equity, IPO, trade sale

Value Creat


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• What is value?


• A buyer’s perspective ~ Trade Sale




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Exit options ~ Trade Sale

Benefits:

• Earn out and exit model ~

fund raising exercise

• Relatively ‘clean’

• Less demanding than an

of cost or resource

Down side:

• You are out of the busine

• Little control over the lon

Trade players buy for:

• Technology play

• Revenue and Synergy play

• Strategic segment play

Corporate strategy: The quest for parenting advantage


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Exit options ~ Trade Sale value

• What do companies want?• prescriptive

Forensically review you businessto understand where the gapsare!

T e c h n o l o g y • IP

•FutureProofing

•FTO

•Competitor

S y n e r g y •Alignment

• Integration

•Clean books

•Ownership

structure

A B C


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• What is value?






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Exit options ~ IPO Why IPO?• Greater access to funds• Access to alternative funds

• Enhances prestige

• Higher valuations than private com

• Potential exit of investors

Risk

£

time

Company Revenues

Company Profits

IPOVC

PE

Friends &

family ~

Angel

Corporate Loans

Why NOT IPO?

• Costly and time consuming ~ appr

• Limits management freedom

• Potential loss of control

• Shareholder expectations

• Value post IPO can go down!• Small businesses can suffer from s

dilution

IPO is not an end game!


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Exit options ~ Private Equity

How does PE work?

• Provide access to finance for expansion• Maximise technology and financing

• Look to leverage and achieve economies of

scale

• Aim to sell within a 5-7 years time horizon

• Focused towards growth and look for 3x ret

• Want a well defined business plan

Risk

£

time

Company Revenues

Company Profits

IPOVC

PE

Friends &

family ~

Angel

Corporate Loans

Potential negatives?

• Look to sell within a 5-7 years time horizon

• Focused towards growth ~ Need a strong

growth story to be of interest

• Challenge yourself if you have the desire for

the journey!


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• What is value?






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Top tips to maximise value!

• Always aim to build a business that will be successful and might happen to be acqui

than building a business for sale!

• Have a long term plan…activities that increase value for your business mostly increa

an acquisition, but not always!

• Strong management team?

• Plant and infrastructure ~ a good idea?

• Define beauty and understand value!

• Right sectors, price point, geographical expansion potential, Technology, IP etc. ~ Make yourself pre

• Ensure that every aspect of the business has a plan.

• IP, Health Economics, reimbursement, manufacturing, Business model scalability etc.

• Understand what you are getting into and find an Buy the ticket take the ride…

Documents

16.00_conalliance_-_cliff_murphy.pdf