AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) to Acquire Cord Blood Registry For $700 Million


AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) announced that it has entered a deal to acquire Cord Blood Registry for $700 million.

The acquisition will be strategic for AMAG Pharmaceuticals as it plans to enlarge its maternal health business. During the announcement, AMAG revealed that CBR accounted for more than 600,000 tissue stem cell and preserved umbilical cord blood units. It, therefore, accounts for the biggest percentage of the total privately stored cord units the United States.

CBR received roughly half of the pro forma revenue collected from storage fees in 2014. The total pro forma revenue collected amounted to $126 million. The deal is heavily supported by the procurement of Lumara Health’s maternal unit that took place in November 2014. The value of the unit acquisition was $675 million.

AMAG has a drug called Makena that reduces the risk of premature birth. The company also has a cancer support care and an anemia management division. Apart from managing the cord storage units, CBR also works closely with research institutions to carry out clinical research on stem cells as a form of disease therapy. Stem cells have been used in more than 80 serious disease cases in the past 20 years.

AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) reported that a good percentage of the American population have already received education about cord blood banking at some point in their lives. There are laws that necessitate that pregnant women should have this information so that they can choose it as an option. AMGEN received $800 million from Barclays Plc and Jefferies Finance LLC. The funds will be used to finance the acquisition that is expected to come to a completion in the third quarter.

CBR’s chief executive officer Geoff Crouse will retain his position at the organization’s helm. AMAG benefited from financial advice from Jefferies LLC and the Deutsche Bank. Goodwin Procter LLP is the company’s legal advisor while Kirkland & Ellis LLP is CBR’s legal advisor. According to AMAG’s CEO William Heiden, CBR is the best strategic suit for the company to achieve its strategic goals in differentiated products.

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