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INDUSTRYBlue Book
CROSSTREEC A P I T A L P A R T N E R S
4Q16Segment: Laboratory
Drug & Device O u t s o u rc i n g
Do
Introduction
Crosstree Capital Partners provides mergers and acquisitions and financing advisory services exclusively to middle-market businesses operating within three health care industry groups – Diagnostics & Tools, Drug & Device Outsourcing, and Healthcare Providers. Having spent more than a decade building the market intelligence, relationships and experience necessary to get our clients the best deal possible, we have advised clients on five continents and consistently lead the market each year in closing successful transactions. Our firm has relationships with nearly every active institutional investor and most active buyers in the market, and we also foster relationships with innovative, emerging private companies in the industry. Using our proprietary integrated information systems, we produce these quarterly Blue Books as a means of sharing a portion of the market intelligence that we gather and maintain. We hope that you find them to be valuable resources.
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4Q16 Blue Book
Drug & Device Outsourcing
Laboratory
Logistics
Sales & Communication
TechnologyDiscovery
Development
CDMO
Analytical
Bioanalytical
Central
Core
Toxicology
Laboratory Industry Segment
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4Q16 Blue Book
Laboratory
Sub-segment Definitions
Segment and Sub-segment Definitions
AnalyticalAnalytical laboratories provide lab services throughout the
CDMO cycle by ensuring the safety, purity and efficacy of a
pharmaceutical product. Analytical labs also test the stability,
shelf life, and storage characteristics of the drug candidate
during the primary manufacturing stage of the CDMO cycle.
BioanalyticalBioanalytical labs assess the biological effects of a drug
compound within a target organism throughout the drug
development process. These labs use assays designed to
measure biological activity during a study. Furthermore,
Bioanalytical labs evaluate the presence of a biological fluid in
a disease-associated protein or biomarker using enzymelinked
immunosorbent assays (“ELISA“).
CentralCentral laboratories provide analytical laboratory services
throughout the drug development process through blood and
tissue analysis. A central or core laboratory’s main function is
to gather and evaluate data used to determine the efficacy of
a drug candidate.
CoreCore labs provide diagnostic services supplemental to the
central labs through traditional (core) and cardiovascular
(ECG) imaging. These labs collect, compare and analyze the
pathological influences of a drug candidate.
ToxicologyToxicology labs provide testing to determine the toxicology
of a substance on animals and cells to prepare parameters for
Phase I human subject clinical studies. Companies providing
toxicology services typically manage animal vivariums
containing models that can range from rodent to non-human
primate.
Laboratory covers all lab services related to the development of a drug. Such labs analyze specimens and images from subjects
and animal models participating in pre-clinical and clinical studies to analyze the effects and results of the drug candidate
being tested. Included in the segment are central and core laboratories, bioanalytical laboratories, analytical laboratories, and
toxicology laboratories.
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4Q16 Blue Book
Index Constitutuents
Laboratory
50
100
150
200
250
300
350
400
Public Equity Index
• Charles River Laboratories International, Inc. (NYSE:CRL)• CMIC HOLDINGS Co., Ltd. (TSE:2309)• Crown Bioscience International (GTSM:6554)• EirGenix Inc. (GTSM:6589)• Eurofins Scientific SE (ENXTPA:ERF)
• hVIVO plc (AIM:HVO)• Medpace Holdings, Inc. (NasdaqGS:MEDP)• Oxford BioDynamics Limited (AIM:OBD)• PhoenixBio Co., Ltd. (TSE:6190)• PRA Health Sciences, Inc. (NasdaqGS:PRAH)
• PT Prodia Widyahusada Tbk (JKSE:PRDA)• Shin Nippon Biomedical Laboratories, Ltd. (TSE:2395)• Suven Life Sciences Limited (BSE:530239)• Syngene International Limited (BSE:539268)
Date Price Date Index Value % Change Qtr/Qtr12/31/2014 12/31/2014 207.1 -
03/31/2015 03/31/2015 231.1 11.6%
06/30/2015 06/30/2015 243.0 5.1%
09/30/2015 09/30/2015 243.5 0.2%
12/31/2015 12/31/2015 286.7 17.7%
03/31/2016 03/31/2016 273.4 -4.6%
06/30/2016 06/30/2016 282.5 3.3%
09/30/2016 09/30/2016 338.2 19.7%
12/31/2016 12/30/2016 331.0 -2.1%Source: Crosstree Capital Partners, Inc.
Crosstree Capital Partners Laboratory Index Statistics
Crosstree Capital Partners Laboratory Index
The following value-weighted equity index, updated through the end of 4Q16, is the Crosstree Capital Partners Laboratory
Index, composed of the stocks of companies that operate within the industry sub-segments comprising Analytical,
Bioanalytical, Central, Core, and Toxicology. To be included in the index, constituents must maintain a market capitalization of at
least $50 million, generate at least 30% of their revenue from Laboratory activities and derive at least 50% their customer base
from the Pharmaceutical, Biotechnology or Medical Device industries.
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4Q16 Blue Book
LaboratoryPublic Equity Valuation Metrics
Laboratory Valuation Multiples, 4Q161,2
The following table presents valuation statistics, as multiples of revenue, EBITDA and tangible book value, of the publicly traded
companies that compose the Crosstree Capital Partners Laboratory Index, as of the end of 4Q16. Enterprise value equals equity
market value (market capitalization), plus net debt, plus preferred stock, minus cash and cash equivalents.
Company Name EV/LTM Revenue EV/LTM EBITDA Price/Tangible BV
Charles River Laboratories International, Inc. (NYSE:CRL) 3.0x 13.3x NM
CMIC HOLDINGS Co., Ltd. (TSE:2309) 0.6x 5.3x 1.3x
Crown Bioscience International (GTSM:6554) 3.6x 23.7x NM
EirGenix Inc. (GTSM:6589) 16.5x NM 3.0x
Eurofins Scientific SE (ENXTPA:ERF) 3.2x 17.3x NM
hVIVO plc (AIM:HVO) 6.7x NM 2.5x
Medpace Holdings, Inc. (NasdaqGS:MEDP) 4.5x 16.2x NM
Oxford BioDynamics Limited (AIM:OBD) NM NM 4.1x
PhoenixBio Co., Ltd. (TSE:6190) 3.2x 18.6x 2.7x
PRA Health Sciences, Inc. (NasdaqGS:PRAH) 2.7x 15.5x NM
PT Prodia Widyahusada Tbk (JKSE:PRDA) 4.3x 41.9x NM
Shin Nippon Biomedical Laboratories, Ltd. (TSE:2395) 2.4x NM 1.0x
Suven Life Sciences Limited (BSE:530239) 4.0x 19.6x 3.6x
Syngene International Limited (BSE:539268) 9.1x 25.2x 9.2x
Mean 4.9x 19.7x 3.4xMedian 3.6x 18.0x 2.9x
Source: Crosstree Capital Partners, Inc. 1NM - Not Meaningful2Multiples calculated on data available at the close of the quarter
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4Q16 Blue Book
Laboratory
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2015 2016
Public Equity Valuation Metrics
Laboratory Historical EBITDA Multiples
The following graph presents the median enterprise value to EBITDA multiple of the companies in the Crosstree Capital Partners
Laboratory Index for each of the trailing eight quarters.
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4Q16 Blue Book
LaboratoryPrivate Placements
Laboratory Private Equity Placements, 4Q16
The following table presents selected data on disclosed private equity placements that occurred during 4Q16 and involved
target companies operating within the Laboratory industry segment, providing details on the investor type, the transaction
date, status and size (where available), and the industry sub-segment and geographic region of the target.
Date Closed Status1 Target Target
Geography Industry Sub-segment Investor Type Size ($mm)
12/27/2016 C Quantitative Imaging Biomarkers in Medicine
Europe Developed
Core Institutional Investors 0.6
12/26/2016 C AnaBios Corporation, Inc.
North America
Bioanalytical Institutional Investors 4.2
12/19/2016 C Joy Orient Translational Medicine Research Center Co., Ltd.
Asia/Pacific Emerging
Core Institutional Investors 14.4
12/07/2016 C Grandomics Biosciences Co., Ltd.
Asia/Pacific Emerging
Core Institutional Investors 14.5
12/05/2016 C Metabolon, Inc. North America
Bioanalytical Institutional Investors 30.0
11/30/2016 C Beijing Novogene Technology Co. Ltd.
Asia/Pacific Emerging
Core Institutional Investors 74.8
11/16/2016 C Paradigm Diagnostics, Inc.
North America
Core Institutional Investors -
10/31/2016 C Proteome Sciences plc Europe Developed
Bioanalytical Undisclosed Investors 2.9
10/24/2016 C Rubicon Research Private Limited
Asia/Pacific Emerging
Analytical Institutional Investors 32.9
Source: Crosstree Capital Partners, Inc. 1C - complete; P - pending
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4Q16 Blue Book
Laboratory
78%
20%2%
Asia/Paci�c Emerging
North America
Various
45%
33%
22%
Asia/Paci�c Emerging
North America
Europe Developed
60%21%
19%
Core
Bioanalytical
Analytical
56%33%
11%Core
Bioanalytical
Analytical
Private Placement Value by RegionPrivate Placement Volume by Region
Private Placement Value by Sub-segmentPrivate Placement Volume by Sub-segment
Private Placement Metrics
The following graphs summarize 4Q16 disclosed private equity placement volume and placement value by geographic region,
as a percentage of the Laboratory industry segment placement volume and placement value totals.
The following graphs summarize 4Q16 disclosed private equity placement volume and placement value by sub-segment, as a
percentage of the Laboratory industry segment placement volume and placement value totals.
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4Q16 Blue Book
Laboratory
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
-
100
200
300
400
500
600
Qtr1 Qtr2 Qtr3 Qtr4
2016
Volum
eV
alue
($m
m)
Value Volume
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
-
50
100
150
200
250
300
Volum
eV
alue
($m
m)
Value Volume
Private Placement Metrics
Laboratory Private Placement Value and Volume by Quarter
The following graph summarizes total quarterly disclosed private equity placement value and placement volume for the
Laboratory industry segment over the trailing four quarters.
Laboratory Private Placement Value and Volume by Month
The following graph summarizes total monthly disclosed private equity placement value and placement volume for the
Laboratory industry segment over the trailing 12 months.
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4Q16 Blue Book
LaboratoryMergers & Acquisitions
Laboratory M&A Transactions, 4Q16
The following table presents selected data on disclosed M&A transactions that were announced during 4Q16 and involved
target companies operating within the Laboratory industry segment, providing details on the identity of the buyer, the
transaction date, status and size (where available), and the industry sub-segment and geographic region of the target.
Date Announced Status1 Target Target
Geography Industry Sub-segment Buyer Size ($mm)
12/26/2016 P Shanghai Find Bio-Tech Co., Ltd. (minority stake)
Asia/Pacific Emerging
Core Sanpower Group Nanjing Investment Management Co. Ltd.
-
12/21/2016 P Yourgene Bioscience Co., Ltd.
Asia/Pacific Emerging
Core Premaitha Health PLC 10.5
12/19/2016 P CMC Biologics A/S Europe Developed
Analytical Asahi Glass Co. Ltd. 514.3
12/15/2016 P Capsugel, Inc. North America
Analytical Lonza Group AG 5,500.0
12/09/2016 C Biopremier - Inovação e Serviços em Biotecnologia, S.A. (majority stake)
Europe Developed
Core SGS SA -
11/30/2016 C The Translational Genomics Research Institute
North America
Core City Of Hope -
11/21/2016 C Reading Clinical Research Ltd
Europe Developed
Bioanalytical Cutest Systems Ltd -
11/18/2016 C Pharmaprogress s.r.l. Europe Developed
Analytical KYMOS PHARMA SERVICES, S .L.
-
11/03/2016 C Averica Discovery Services Inc.
North America
Analytical Neopharm Laboratories -
11/02/2016 C Vivo Biosciences Inc. North America
Bioanalytical LifeNet Health, Inc. -
10/26/2016 P Cyprotex plc Europe Developed
Toxicology Evotec AG 86.4
10/19/2016 C Floragenex, Inc. North America
Core Sedia Biosciences Corporation
-
10/12/2016 P Transgenomic Inc. North America
Bioanalytical Precipio Diagnostics, LLC
-
10/11/2016 P Irvine Pharmaceutical Services, Inc.
North America
Analytical NITTO DENKO Avecia Inc.
-
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4Q16 Blue Book
Laboratory
98%
2%Analytical
All Others
37%
31%
19%
13%
Analytical
Core
Bioanalytical
Toxicology
M&A Transaction Value by Sub-segmentM&A Transaction Volume by Sub-segment
Mergers & Acquisitions
The following graphs summarize 4Q16 disclosed M&A transaction volume and transaction value by sub-segment, as a
percentage of the Laboratory industry segment transaction volume and transaction value totals.
Laboratory M&A Transactions, 4Q16 (Continued)Date Announced Status1 Target Target
Geography Industry Sub-segment Buyer Size ($mm)
10/10/2016 P Chemon Co., LTD. Asia/Pacific Developed
Toxicology Ebest Special Purpose Acquisition 2 Co., Ltd.
-
10/06/2016 C ProPharma Group, Inc. North America
Analytical Linden Capital Partners -
Source: Crosstree Capital Partners, Inc. 1C - complete; P - pending
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4Q16 Blue Book
Laboratory
-
2.0
4.0
6.0
8.0
10.0
12.0
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Volum
eV
alue
($m
m)
Value Volume
90%
10%0.2%
North America
Europe Developed
Various
50%
31%
13%
6%
North America
Europe Developed
Asia/Paci�c Emerging
Asia/Paci�c Developed
M&A Transaction Value by RegionM&A Transaction Volume by Region
Mergers & Acquisitions Metrics
Laboratory M&A Transaction Value and Volume by Month
The following graph summarizes total monthly disclosed M&A transaction value and transaction volume for the Laboratory
industry segment over the trailing 12 months.
The following graphs summarize 4Q16 disclosed M&A transaction volume and transaction value by geographic region, as a
percentage of the Laboratory industry segment transaction volume and transaction value totals.
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4Q16 Blue Book
Laboratory
- 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0
-
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
Qtr1 Qtr2 Qtr3 Qtr4
2016
Volum
eV
alue
($m
m)
Value Volume
Mergers & Acquisitions Metrics
Laboratory M&A Transaction Value and Volume by Quarter
The following graph summarizes total quarterly disclosed M&A transaction value and transaction volume for the Laboratory
industry segment over the trailing four quarters.
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4Q16 Blue Book
Call us to schedule a confidential appointment
LaboratoryUpcoming Conferences
Conference Dates Location
TOXEXPO 2017 March 12-16, 2017 Baltimore, MD
DIA 29th Annual EuroMeeting March 19-21, 2017 Glasgow, Scotland
Interphex 2017 March 21-23, 2017 New York, NY
ACS National Meeting & Exposition, 253rd April 2-6, 2017 San Francisco, CA
Parenteral Drug Association 2017 April 3-5, 2017 Anaheim, CA
EB 2017 April 22-26, 2017 Chicago, IL
AAPS BIO 2017 May 1-3, 2017 San Diego, CA
Pharma ChemOutsourcing 2017 May 1-3, 2017 Long Branch, NJ
Executive War College 2017 May 2-3, 2017 New Orleans, LA
informEx 2017 May 16-18, 2017 Philadelphia, PA
Outsourcing Clinical Trials - Europe 2017 May 16-17, 2017 Barcelona, Spain
Bio-IT World Conference & Expo, 2017 May 23-25, 2017 Boston, MA
Outsourcing Clinical Trials East Coast 2017 May 23-24, 2017 King of Prussia, PA
Crosstree Capital Partners’ Drug & Device Outsourcing Conference Schedule
Our bankers attend the major global Drug & Device Outsourcing industry conferences. The following table contains a
chronological listing of upcoming Drug & Device Outsourcing conferences that our bankers will be attending, covering the
Discovery, Development, CDMO, Laboratory, Logistics, Sales & Communication, and Technology segments.
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Shane C. Senior, CFAHead of Drug & Device Outsourcing
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4Q16 Blue Book
Call us to schedule a confidential appointment
Crosstree has a dedicated and exclusive focus on the Diagnostics & Tools, Drug & Device Outsourcing, and Healthcare Providers
industries. Since inception, the firm has been a consistent leader within our focus areas, closing more than 50 successful
transactions worth more than a billion dollars in transaction value, with companies ranging from private equity-backed
consolidators to Fortune 50 publicly-traded companies. In the process, we have represented clients on five continents, and
more than 40% of our transactions have been cross-border. Ten of our recent deals are highlighted below.
LaboratoryRecent Crosstree Transactions
Acquired by
June 2014
Merged with
July 2014September 2014
Received a strategic investment fromAcquired by
May 2015
Acquired by
July 2015
®
Acquired by
July 2015
Acquired by
November 2015
Acquired by
June 2016
Acquired by
December 2016
ProPhasePrecision. Innovation. Impact.
Acquired the OligoManufacturing Business of
February 2017
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Shane C. Senior, CFAHead of Drug & Device Outsourcing
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4Q16 Blue Book
To download or subscribe, visit www.crosstreecapital.com/publications/
Each quarter Crosstree publishes Industry Blue Books for each of our three industries - Diagnostics & Tools, Drug & Device
Outsourcing, and Healthcare Providers – along with separate Blue Books for each of the four to seven segments composing
each industry, for a combined total of 18 quarterly Blue Books. In addition, we publish weekly Industry Blue Sheets, concise
summary pieces covering the latest two weeks of private placement and M&A transactions for each of our three industries. All
of these publications are available for download or subscription on our website.
Diagnostics & Tools
Dt
Industry Overview
Diagnostics & Tools
Dt
Diagnostic ServicesDiagnostics & Tools
Dt
Diagnostics & Tools
Dt
In Vitro Diagnostics
Diagnostics & Tools
Dt
In Vivo Diagnostics
Diagnostics & Tools
Dt
Life Sciences Tools
Do
Industry Overview
DoDrug & Device Outsourcing
Discovery
DoDrug & Device Outsourcing
Development
DoDrug & Device Outsourcing
CDMO
DoDrug & Device Outsourcing
Laboratory
DoDrug & Device Outsourcing
DoDrug & Device Outsourcing
Industry OverviewLogistics
DoDrug & Device Outsourcing
Industry OverviewSales &Communication
DoDrug & Device Outsourcing
Technology
HpHealthcare Providers
HpHealthcare Providers
Industry Overview
HpHealthcare Providers
Hospitals &Health Systems
HpHealthcare Providers
ResidentialCare Facilities
HpHealthcare Providers
Medical Practices
HpHealthcare Providers
Ancillary Services
Laboratory
Crosstree Capital Partners’ Quarterly Industry Blue Books
Crosstree Capital Partners’ Weekly Industry Blue Sheets
Crosstree Publications
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4Q16 Blue Book
Please contact us for more information
Laboratory
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Industry Blue Book, 4Q16
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Shane C. Senior, CFAHead of Drug & Device Outsourcing
www.crosstreecapital.com
Although the information in this sales literature has been obtained from or is based upon data from sources Crosstree Capital Partners, Inc. believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This sales literature is for informational purposes only and is not intended as an offer or solicitation of the purchase or sale of a security. All securities transactions are offered by and conducted through Crosstree Capital Securities, LLC, a broker-dealer registered with the SEC, a member of FINRA (www.finra.org) and SIPC (www.sipc.org), and an affiliate of Crosstree Capital Partners.
© 2016 Crosstree Capital Partners, Inc. All rights reserved.
www.crosstreecapital.com
Shane C. Senior, CFAHead of Drug & Device Outsourcing
www.crosstreecapital.com