The last two weeks in healthcare have brought a welcome sight: some high-profile strategic transactions. On the same day that Kindred Healthcare announced a $900 million cash-and-stock acquisition of RehabCare, Danaher initiated its tender offer for the shares of Beckman Coulter for a cool $6.8 billion. These two deals were followed by this week’s deal announced between Sanofi and Genzyme for up to $20 billion. This is the first time in a while that we’ve seen the size and magnitude of strategic acquisitions in healthcare in some time.
As it relates to Obamacare, the Senate acted in bipartisan fashion earlier this month to repeal a provision that requires small businesses to file a 1099 for any vendor who receives $600 or more. The original intent of this provision was to improve tax collections in order to offset the cost of the legislation, but became increasingly unpopular as the paperwork and costs were estimated to affect at least 40 million small businesses. President Obama appeared to give the green light for repealing this provision in his State of the Union address on January 25. So why hasn’t it been repealed by the House yet? The Pay-As-You-Go Act requires legislators to identify “offsets” that would result in a revenue-neutral budget, and the repeal is estimated to reduce collections. Gotta love government in-action.
The good news is that a combination of regulatory clarity, a more robust financing environment and improving economic fortunes are resulting in a more favorable environment for transactions and financings for selected industries and companies. Feel free to contact us if you’d like to discuss a specific situation.
