AMAG Pharmaceuticals to acquire Cord Blood Registry for $700 Million

Tuesday, Jun 30, 2015

AMAG Pharmaceuticals Inc., a specialty drug company, said it will acquire Cord Blood Registry for $700 million to expand its maternal health business.

CBR houses more than 600,000 preserved umbilical cord blood and tissue stem cell units, more than half of all privately stored cord units in the U.S., Waltham, Massachusetts-based AMAG said Monday in a statement announcing the deal.

The target company got about half of last year’s $126 million in pro forma revenue from storage fees, which AMAG said will provide a predictable base for potential future growth. The deal builds on its November acquisition of Lumara Health’s maternal unit in a $675 million purchase. AMAG sells Makena, a drug used to reduce the risk of premature birth, and has divisions in anemia management and cancer support care.

CBR also works with academic research institutions that conduct clinical trials to evaluate the use of stem cells for disease therapy. Newborn stem cells have been used for more than 20 years in patients with over 80 serious diseases, AMAG said in the statement. Since 2005, 27 states, representing about 75 percent of the U.S. population, have passed some form of cord blood banking education laws requiring that pregnant women be informed about options for its use, the company said.

AMAG secured $800 million in committed debt financing from Jefferies Finance LLC and Barclays Plc for the deal, which is anticipated to close in the third quarter. The purchase is expected to add to AMAG’s earnings and provide as much as $15 million in annual cost savings, the company said.

Geoff Crouse, CBR’s chief executive officer, will continue to lead the unit once the acquisition is completed, AMAG said.

Deutsche Bank and Jefferies LLC served as financial advisers to AMAG on the transaction. AMAG’s legal adviser is Goodwin Procter LLP. CBR’s legal adviser is Kirkland & Ellis LLP.