Public Storage to acquire rival Simply Self Storage for $2.2bn

BY Richard Summerfield

Storage operator Public Storage has agreed to acquire Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) in a deal worth $2.2bn.

The deal, which is expected to close in the third quarter of 2023, subject to customary closing conditions, will generate over $600m in profit, Blackstone said. The firm acquired Simply in October 2020 from Brookfield Asset Management for approximately $1.2bn.

“We are pleased to welcome Simply’s team, customers, and third-party management partners to Public Storage’s industry-leading brand and platform,” said Joe Russell, chief executive of Public Storage. “This acquisition reflects the continued execution of our multi-factor external growth platform, which includes acquisitions, development, redevelopment, expansion, and third-party management. We are pleased to complete this important transaction with Blackstone, which further demonstrates our position as an acquirer of choice in the industry. Blackstone has done a tremendous job of growing and improving the quality and operations of the Simply portfolio over the past few years.”

“Where you invest matters, and this transaction demonstrates the strong investor demand for the high-quality assets and platforms we have assembled within BREIT,” said Nadeem Meghji, head of Blackstone Real Estate Americas. “This sale is a terrific outcome for BREIT stockholders and enables us to further concentrate BREIT’s portfolio in its highest growth sectors. Public Storage is a leader in its space and will be a terrific steward of this portfolio.”

Simply Storage’s portfolio comprises 127 wholly-owned properties and 9 million net rentable square feet that are geographically diversified across 18 states and located in markets with population growth that has been approximately double the national average since 2018. During BREIT’s ownership period, Blackstone made investments into the Simply platform that enabled the company to enhance the quality of the portfolio and management team, and ultimately significantly increased its net operating income.

Public Storage has been in a state of growth over the last few years. Since 2019, the company has expanded its portfolio by approximately 55 million net rentable square feet, or 34 percent, through $10.6bn worth of acquisitions, development and redevelopment, including Simply and additional properties previously announced as under contract.

News: Public Storage to acquire rival Simply Self Storage for $2.2bn

Eli Lilly to acquire Versanis for $1.925bn

BY Fraser Tennant

In a deal designed to strengthen its position in the fast-growing market for weight-loss treatments, US pharmaceutical company Eli Lilly is to acquire biopharmaceutical firm Versanis.

Under the terms of the definitive agreement, Versanis shareholders will receive $1.925bn in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain development and sales milestones.

“Eli Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans,” said Ruth Gimeno, group vice president, diabetes, obesity and cardiometabolic research at Eli Lilly. “By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients.”

A private clinical-stage biopharmaceutical company focused on the development of new medicines for the treatment of cardiometabolic diseases, Versanis’ lead asset, bimagrumab, is being advanced in the BELIEVE Phase 2b study as a novel treatment to help adults achieve and maintain both fat loss and a healthy body composition.

Analysts expect the market for weight-loss drugs to reach up to $100bn within a decade, with early movers such as Eli Lilly and Novo Nordisk acquiring a large portion of the market.

“It has been a privilege for our team to advance bimagrumab to address one of the greatest health crises of our time,” said Mark Pruzanski, chairman and chief executive of Versanis. “As a global leader developing life-changing medicines, Eli Lilly is ideally positioned to realise the potential of bimagrumab in combination with its incretin therapies to benefit people living with cardiometabolic diseases.”

The transaction between Eli Lilly and Versanis is subject to customary closing conditions.

News: Eli Lilly to buy Versanis for up to $1.93 billion in obesity drugs push

Bausch + Lomb acquires Novartis’ eyecare portfolio

BY Fraser Tennant

In a deal designed to boost its eyecare portfolio, global eye health company Bausch + Lomb Corporation has acquired a number of the ophthalmology assets of Swiss multinational pharmaceutical corporation Novartis.

Under the terms of the definitive agreement, Canada-based Bausch + Lomb will acquire Novartis’ assets for up to $2.5bn, including an upfront payment of $1.75bn in cash, with potential milestone obligations up to $750m based on sales thresholds and pipeline commercialisation.

Novartis’ ophthalmology assets include its anti-inflammation eye drop Xiidra, experimental drug libvatrep for chronic ocular surface pain and the rights to use the Swiss pharma company's AcuStream dry-eye drug delivery device.

“This acquisition is a prime example of our strategy in action, as it provides needed scale for the company and transforms our pharmaceuticals business by making us a leader in ocular surface diseases,” said Brent Saunders, chairman and chief executive of Bausch + Lomb. “The deal is also expected to accelerate margin expansion through a larger mix of pharmaceutical products in our portfolio, provide strong and immediate earnings accretion and presents a clear path to deleverage, making it financially compelling.”

Founded in 1853, Bausch + Lomb has a significant global R&D, manufacturing and commercial footprint with approximately 13,000 employees and a presence in nearly 100 countries. Likewise, in its quest to find new medicines, Novartis consistently ranks among the world’s top companies investing in R&D.

“This transaction will enhance our focus on prioritised innovative medicines to alleviate society’s greatest disease burdens, achieve the greatest patient impact and drive our growth strategy,” said Ronny Gal, chief strategy & growth officer at Novartis. “Our ongoing portfolio refinement enables us to best deploy our scientific expertise and resources towards priority programmes and therapeutic areas, while remaining open to opportunistic development for additional high impact conditions leveraging our advanced technology platforms.

The transaction – which is expected to close in the second half of 2023 – has been approved by the board of directors of each company and is subject to receipt of regulatory approval and other customary closing conditions.

Mr Gal concluded: “We believe that Bausch + Lomb has the capabilities, scale and commitment to continue the work of Novartis in delivering and developing much needed therapies for patients suffering from dry eye and related conditions.”

News: Bausch + Lomb buys Novartis drugs for $1.75 billion to boost eye-care portfolio

UnitedHealth Group to acquire Amedisys in $3.3bn deal

BY Richard Summerfield

UnitedHealth Group has agreed to acquire home health and hospice caregiver Amedisys in a deal worth $3.3bn.

Under terms of the deal, Optum, the diversified health care services arm of UnitedHealth Group, will acquire Amedisys in an all-cash transaction for $101 per share. Optum previously made a bid to buy Amedisys for $100 per share. The agreed price represents a 10.7 percent premium to Friday’s closing price of $91.21.

“The combination of Amedisys with Optum unites two organizations dedicated to providing compassionate, value-based comprehensive care to patients and their families”, Amedisys wrote in a statement announcing the deal.

Once the deal closes Amedisys will become a wholly-owned subsidiary of UnitedHealth.

“Amedisys’ commitment to quality and care innovation within the home, and the patient-first culture of its people, combined with Optum’s deep value-based care expertise can drive meaningful improvement in the health outcomes and experiences of more patients at lower costs, leading to continued growth,” said Patrick Conway, chief executive of Optum Care Solutions.

The deal for Amedisys also led to the cancellation of an all-stock deal between Amedisys and Option Care Health. As part of the mutual termination agreement, Option Care Health will receive a $106m termination fee. Consistent with Option Care Health’s commitment to creating shareholder value, the company will incorporate the termination fee into its established capital allocation strategy, it noted in a statement.

“While we are disappointed in this outcome, Option Care Health has a long track record of delivering value for our shareholders,” said John C. Rademacher, president and chief executive of Option Care Health. “We take a disciplined approach to acquisitions and, as we evaluated our options, we applied this discipline to ensure we continue to create value for all of our key stakeholders.

“Option Care Health benefits from a leading platform in home and alternate site infusion services and a proven track record of execution,” he continued. “We remain confident in our growth trajectory, which is underpinned by current industry trends and market forces as well as our strong financial position. Our team is committed to serving all our stakeholders by providing unsurpassed care and superior clinical outcomes in the home or ambulatory setting, and we will continue to identify ways to increase the value we can deliver.”

In-home medical services are becoming an area of focus for healthcare companies, with several notable deal occurring in the space in the US. Earlier this year, CVS Health spent $8bn on Signify Health as part of its effort to add a home care provider and boost its healthcare and technology platform.

News: Amedisys agrees to $3.3 bln UnitedHealth offer, scraps Option Care deal

Civitas strikes $4.7bn Permian basin deals

BY Richard Summerfield

Civitas Resources has agreed to acquire oil & gas operations in the Permian Basin managed by private equity firm NGP Energy Capital Management for $4.7bn.

The deals will see Civitas acquire oil producing assets in the Midland and Delaware Basins of west Texas and New Mexico. The agreements were signed with affiliates of Hibernia Energy III, LLC and Tap Rock Resources, LLC. Under the terms of the deal, Civitas has agreed to acquire a portion of Tap Rock Resources’ assets and all of Hibernia Energy III’s operations. The company will pay cash, using a mix of existing reserves and debt, and issue 13.5 million shares to NGP.

The deals are expected to close in the third quarter of 2023. The two definitive agreements will see Civitas acquire oil producing assets from Hibernia Energy’s Midlands area of west Texas for $2.25bn in cash, and from Tap Rock Resources for Delaware area assets in New Mexico for $2.45bn, which includes $1.5bin in cash.

“These accretive and transformative transactions will immediately create a stronger, more balanced and sustainable Civitas,” said Chris Doyle, president and chief executive of Civitas. “By acquiring attractively priced, scaled assets in the heart of the Permian Basin, we advance our strategic pillars through increased free cash flow and enhanced shareholder returns. We will soon have nearly a decade of price-resilient, high-return drilling inventory. Our strong capital structure allowed us to capture these transformational assets, and, importantly, behind the strength of the pro forma business, we have a clear path to reduce leverage and maintain long-term balance sheet strength.”

The combined transactions will add 68,000 net acres in the Midland and Delaware basins and will add combined proved reserves of 335 million barrels of oil equivalent (boe), as at the end of 2022. The assets will increase Civitas’ existing production by 60 percent, adding 100,000 boe per day of current production. At present, Denver-based Civitas currently operates on more than 500,000 net acres and produces roughly 160,000 boe per day.

Civitas said the cash flow generated by the assets was a significant factor in its pursuit of a deal. The assets will allow Civitas’ dividend payments in 2024 to be boosted by around 20 percent. To help the company repay the debt it will be using to fund the acquisitions, Civitas also announced that it would have to halve its $1bn share buyback target, which was initially announced in February and was set to run to the end of 2024.

NGP provided Tap Rock with capital in 2016 and backed Hibernia with $250m of equity in 2017.

News: Civitas Resources enters Permian basin in $4.7 billion deals