AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) announced, on June 15, 2018, that it has entered into a definitive agreement to divest Cord Blood Registry (CBR®) to GI Partners, a private equity investment firm, for $530 million in an all cash sale. The parties expect to close the transaction in the third quarter of 2018.
GI Partners is a private investment firm based in San Francisco. The firm has raised $16 billion in capital from leading institutional investors across the globe. GI Partners’ private equity team focuses on investments in the IT Infrastructure, Healthcare, Software, and Services sectors.
CBR® helps families to preserve newborn stem cells, which are used today in transplant medicine for certain cancers and blood, immune and metabolic disorders, and have the potential to play a valuable role in the ongoing development of regenerative medicine.
Founded in 1992, CBR is entrusted by parents with storing samples from more than 600,000 children.
CBR has helped more than 400+ families use their cord blood stem cells for established and experimental medical treatments, more than any other family cord blood bank. CBR’s goal is to expand the potential scope of newborn stem cell therapies that may be available to patients and their families.
In recognition of its work on behalf of children and families and for its success in the scientific advancement of the field of regenerative medicine, CBR was honored as the 2011 Arizona Bioscience Company of the Year.
California Cryobank provides frozen donor sperm and egg services, reproductive tissue storage, and cord blood/tissue banking (through FamilyCord) and is registered with the FDA, accredited by the AATB and AABB, and licensed by the states of California and New York.
“We are excited to partner with GI Partners in pursuing significant growth and expansion opportunities that lie ahead for our combined company,” said Richard Jennings, CEO of CCB, who will continue on as CEO of the combined business. “As a combined entity with GI Partners’ support, we are well positioned to continue our mission of helping grow and protect healthy families around the world.”
Dave Kreter, Managing Director at GI Partners said, “We have been following the growing and dynamic reproductive and stem cell space for several years and were attracted to these two companies by their robust customer and market characteristics. Their combination represents a unique opportunity to create a new platform better positioned to further expand their industry leading capabilities. We are excited to collaborate with management to extend the combined company’s capabilities internationally and make critical investments to support its next phase of growth.”
Howard Park, Managing Director at GI Partners said, “CBR and CCB are market leaders with significant brand recognition in their respective end markets. The combination of these two exceptional companies will create a natural one-stop shop for meeting customers’ reproductive and stem cell storage needs. The outstanding leadership team and medical professionals are devoted to the patients they serve and to the scientific excellence they demonstrate. We look forward to working with Richard and his talented team to further accelerate the growth of the combined business.”
The combined company represents the fifth platform investment in GI Partners Fund V, a $2.8 billion private equity fund raised in 2017.
AMAG intends to use the majority of the transaction proceeds to pay off the remaining $475 million of principal of its 7.875% Senior Notes due 2023.
“With the recent back-to-back FDA approvals of the Makena® subcutaneous auto-injector and the expanded Feraheme® label, the launch of Intrarosa® and the FDA acceptance of the bremelanotide new drug application, we are well positioned for significant and durable future growth,” said Ted Myles, AMAG’s chief financial officer. “We believe eliminating the high-yield bonds from our capital structure will align our balance sheet with our long-term growth plans and our renewed focus on growing and further diversifying our pharmaceutical business.”
AMAG reported that the transaction has been unanimously approved by AMAG’s Board of Directors. The closing of the AMAG transaction, including the timing of such closing, will be governed by the terms of the definitive agreement, including the satisfaction of customary closing conditions.
GI Partners also reported that the combined transaction is expected to close in the third quarter of 2018, subject to customary closing conditions and regulatory approvals.