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Water Street Sells PDC to Brady Corporation

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has sold Precision Dynamics Corporation (“PDC”) to Brady Corporation (NYSE: BRC) in a cash transaction for $300 million, subject to customary working capital and post-close adjustments. 

Water Street divested PDC after spending five years building the company into a global leader in patient safety identification (ID) through a combination of strategic acquisitions and organic initiatives.  Headquartered in Valencia, Calif., PDC designs and manufactures products used by hospitals across the United States to reduce medical errors, and integrate and share patient data.

Water Street partnered with PDC’s founders and management team in 2007 to invest in the company when it specialized in health care ID wristbands.  Two years later, Water Street facilitated PDC’s acquisition of TimeMed Labeling Systems, Inc. to expand the company’s products into health care labeling systems.  In 2010, Water Street initiated an industry-leading merger between PDC and The St. John Companies to create the world’s foremost provider of health care wristbands, specialty labels and identification solutions.  The firm recruited an experienced management team to lead the combined company.   It invested in PDC’s infrastructure including a new headquarters, manufacturing facility and technology platform to more effectively serve customers.

“PDC is an excellent example of the long-term value Water Street can create in partnership with founders and executives of middle-market health care companies.  When we first met with PDC’s founders, we proposed a strategic path to build on the company’s strength in hospital ID wristbands.  We invested in the company’s product development and manufacturing capabilities, and significantly broadened its product portfolio to transform PDC into a global leader in patient safety identification,” said Curt Selquist, an operating partner with Water Street and chairman of PDC.  “We are pleased that the successful execution of our strategy resulted in a highly regarded market leader purchasing PDC to further its long-term growth.”

Brady President and Chief Executive Officer Frank M. Jaehnert stated, “The acquisition of PDC provides an anchor position for Brady in the attractive health care identification space and fits well with our mission to identify and protect premises, products and people.  The company’s management expertise, large customer base, strong channels to market, and broad product offering have made PDC the domestic market leader in health care identification.  The strengths of PDC, together with Brady’s health care identification product offering, deep materials and printer expertise, and our global footprint, make this a very attractive business combination.”

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Brady Corporation Purchases PDC from Water Street

Brady Corporation (NYSE:BRC) (“Brady”), a world leader in identification solutions, announced today that it has acquired Precision Dynamics Corporation (“PDC”) from Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, in a cash transaction for $300 million, subject to customary working capital and post-close adjustments. 

PDC, with annual sales of approximately $173 million, is a leader in identification products primarily for the healthcare market, specializing in patient wristbands, specialty labels and identification systems used in hospitals to reduce medical errors and integrate and share patient data.

PDC, founded in 1956, is based in Valencia, Cal., and employs approximately 1,000 people globally.  The company has manufacturing facilities in Tijuana, Mexico and Port Orange, Fla., and a European sales office with light manufacturing in Nivelles, Belgium.  PDC’s healthcare wristband and label systems are used by most U.S. hospitals and reach every touch point in the delivery of patient care, from admissions to discharge.  PDC’s products also meet important patient safety guidelines of The Joint Commission, FDA, AHA, and HIPAA.  In addition to its primary focus on healthcare identification, PDC also offers wristband products for the leisure and entertainment industries and for crowd control and law enforcement utilizing technologies including RFID, holograms and barcodes.  PDC products are sold through a direct sales force, distributors and system integrators.

“The acquisition of PDC, a leader in the U.S. healthcare identification space, provides an important anchor position for Brady in the attractive healthcare market and fits well with our mission to identify and protect premises, products and people, and our vision to be the market leader in all of our businesses,” said Brady President and Chief Executive Officer Frank M. Jaehnert.  “PDC’s highly regarded management team comes with deep experience in the healthcare identification space and has been very successful in building PDC into the strong business that it is today.  PDC’s large customer base, strong channels to market and broad product offering together with Brady’s laboratory and people identification products, deep materials and printer expertise, and global footprint, make this a very attractive business combination and provide a strong foundation to build upon PDC’s market leading position.”

Curt Selquist, an operating partner with Water Street and chairman of PDC stated, “Over the last five years, we expanded and enhanced PDC’s product development and manufacturing capabilities, and significantly broadened its portfolio of identification products through strategic acquisitions.  The sale of PDC to such a highly regarded market leader in identification solutions fulfills our mission of having PDC end up with a company that continues this mission of long-term profitable growth.”

Excluding one-time acquisition-related costs, Brady expects this acquisition to be slightly accretive to earnings per diluted share for the remainder of fiscal 2013, and $0.10 to $0.15 accretive to earnings per diluted share in the first full fiscal year.  The non-recurring acquisition-related costs are expected to include a one-time, non-cash tax charge of $25 to $30 million related to the repatriation of cash to the U.S. in financing this acquisition and $8 to $12 million of other acquisition-related expenses.

Brady will hold a conference call to discuss this announcement at 7:30 a.m. Central Time on December 31, 2012.  Interested parties can listen to the live Web cast by logging on to www.bradycorp.com.

 Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Its products help customers increase safety, security, productivity and performance and include high-performance labels and signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has more than 1 million customers in electronics, telecommunications, manufacturing, electrical, construction, , medical and a variety of other industries.  Brady is headquartered in Milwaukee and as of July 31, 2012, employed approximately 6,900 people at operations in the Americas, EMEA and Asia-Pacific. Brady’s fiscal 2012 sales were approximately $1.32 billion.  Brady stock trades on the New York Stock Exchange under the symbol BRC.  More information is available on the Internet at www.bradycorp.com or www.pdcorp.com .

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Water Street Raises $750 Million Private Equity Fund

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today the closing of its third private equity fund, Water Street Healthcare Partners III, L.P. (“Fund III”).

The fund closed at its cap of $750 million of investor commitments, exceeding the original target of $650 million when fundraising began in early June.  Investors in the fund include leading domestic and international pension funds, endowments and financial institutions, most of which have invested in Water Street since the firm raised its first fund in 2006.

“We are very pleased with the value Water Street has built in its group of health care companies, and the strong results its team has achieved over the past six years,” said Investment Director Brian Welker, Allianz Capital Partners, an investor in Water Street since 2006. “What we appreciate most about Water Street is how it engages its entire team in the value creation process.  It leverages the vast experience of its operating partners with the financial expertise of its investment partners to proactively source and invest in attractive companies, strategically expand their products and services, and build them into market leaders.”

Water Street has completed more than 30 strategic acquisitions and mergers, the majority of which were privately negotiated, to build 16 market-leading health care companies in six years.  The firm has acquired and grown its companies through partnerships with the world’s premier health care corporations including Johnson & Johnson, Medtronic, Inc. and Gentiva Health Services, Inc., as well as founders and executives of middle-market companies.  In the past three months, Water Street acquired Breg, Inc. from Orthofix International, N.V., divested its dental pharmaceutical company, OraPharma, to Valeant Pharmaceuticals International, Inc., and divested Physiotherapy Associates after building into a national outpatient rehabilitation services leader.

“We are deeply grateful to our investors for their overwhelming support of Water Street.  Their recognition of the results our team has achieved and enthusiasm for our strategy enabled us to raise this fund efficiently.  Importantly, by extending our partnership, investors continue to support our strategy of building market-leading companies of greater long-term value in targeted growth segments of health care.  We will continue to invest our team’s deep health care expertise, extensive operating experience and network of industry relationships to create transformational growth for our companies and deliver outstanding results for our investors,” said Tim Dugan, managing partner, Water Street.

With Fund III, Water Street’s total capital under management increases to nearly $2 billion.  Water Street will continue to pursue proprietary investments in four segments of health care: medical and diagnostic products and devices, specialty distribution, outsourced health care services, and specialty pharmaceutical products and services.  Target investments range in size from $50 million to $500 million in value.  Water Street will continue to grow its companies through a combination of strategic acquisitions and organic initiatives.

Water Street closed its inaugural equity fund of $370 million in 2006 and its second equity fund of $650 million in 2008.

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Breg Appoints Former Integra CEO as Chairman

Breg, Inc., a premier provider of sports medicine products and services, today announced the appointment of Stuart M. Essig, 50, as chairman of the board.

Mr. Essig is the former chief executive officer of Integra LifeSciences Holdings Corporation, having retired from the position earlier this year.  The appointment of Mr. Essig is Breg’s first outside board appointment since Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, invested in Breg last month with plans to build it into a market leader specializing in nonsurgical orthopedic products.

“We are thrilled to have an executive of Stuart’s caliber and experience join our board,” said Brad Lee, president, Breg.  “Together with Water Street, we plan to expand Breg to play a greater role in advancing the growing area of nonsurgical orthopedic care.  Stuart’s expertise in the medical products sector and his experience growing Integra into a global leader will be extremely beneficial to our management team as we embark on a strategy to broaden Breg’s portfolio of products and value-added services.”

During his 14-year tenure as Integra’s CEO, Mr. Essig transformed the company from a single-technology organization with $15 million in annual revenues to a global surgical products company with more than $780 million revenues in 2011.  Prior to Integra, Mr. Essig served as managing director of health care for Goldman, Sachs & Co., where he specialized in mergers and acquisitions for medical device, pharmaceutical and biotechnology companies. Mr. Essig currently serves as non-executive chairman of Integra LifeSciences and a board member of St. Jude Medical Corporation.  He previously was a director of Zimmer Holdings, Inc., and a member of the executive committee and treasurer of the Advanced Medical Technology Association (ADVAMED).

“Our team has built a strong relationship with Stuart over the past 14 years, as he spearheaded Integra’s impressive growth through a combination of innovation and consolidation.  Stuart’s approach to growth complements Water Street’s value creation model, which builds companies into market leaders through both organic strategies and transformational acquisitions.  We are pleased to have recruited Stuart to the board as chairman and look forward to him assuming a leadership role in working with Brad and the Breg management team,” said Curt Selquist, an operating partner with Water Street and a board member of Breg.

Breg provides premium, high-value sports medicine products and services that advance orthopedic patient care. From pioneering cold therapy and innovative bracing to caring customer service and award-winning orthopedic practice solutions, Breg delivers a 360°customer experience unmatched in the industry. Founded in 1989, Breg is based in Carlsbad, CA, and is a company of Water Street Healthcare Partners, a strategic private equity firm focused exclusively on health care. Visit www.breg.com.

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New Century Health Appoints Former HealthSpring President to Board

New Century Health announced today that its board of directors has appointed Michael Mirt a director of the company.

The company announced the appointment as it continues the expansion of its specialty care management services to payers and physician practices across the United States.

Mr. Mirt brings to New Century Health more than 30 years of leadership experience in the health insurance industry. Most recently, he was president of HealthSpring, one of the largest Medicare Advantage plans in the United States. The company was acquired by Cigna Corporation earlier this year. Previously, Mr. Mirt was executive vice president and chief operating officer of AmeriChoice,a UnitedHealth Group company offering health care coverage to Medicaid beneficiaries. He also served as regional president of Cigna Healthcare.

“We are very pleased to have recruited Mike to New Century Health. His extensive experience in building highly specialized insurance businesses will bring a valuable perspective to the company as we expand our services to more payers, particularly those that serve the Medicare market,” said Steve Cosler, chairman of New Century Health and an operating partner with Water Street Healthcare Partners.

Founded in 2002, New Century Health was acquired by Water Street, a strategic private equity firm focused exclusively on health care, in 2010. To accelerate the company’s position as the leading specialty care services provider, Water Street recruited industry leaders to the management team, and invested in New Century Health’s infrastructure and technology. New Century Health has grown to serve more than 2 million people covered by Medicare, Medicaid and commercial payers.

“We are honored to have Mike serve on our board of directors,” said Atul Dhir, M.D., Ph.D., chief executive officer of New Century Health. “His distinguished leadership experience will provide us with invaluable guidance as we expand payer and physician access to our pioneering, quality-based health care solutions.”

New Century Health is a national specialty care management company that provides comprehensive technology and clinical solutions to enhance the quality and efficiency of patient care. Its customers include both regional and national health plans, and physician practices providing specialty care services to Medicare, Medicaid and commercial members. New Century Health, an official licensee of the NCCN Drugs & Biologics CompendiumTM, is also collaborating with the American Cancer Society and the American Heart Association to promote guidelines-based treatment for oncology, cardiology and other specialties. To learn more about New Century Health, visit www.NewCenturyHealth.com.

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Water Street Completes Divestiture of OraPharma

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has completed a strategic divestiture of OraPharma, Inc. to Valeant Pharmaceuticals International, Inc.

Headquartered in Horsham, Pennsylvania, OraPharma is a leading specialty pharmaceutical company focused on dental and oral health care.

Water Street acquired OraPharma from Johnson & Johnson in 2010. The firm established OraPharma as a standalone company, and recruited a high-caliber management team led by Janet Vergis, former chief executive officer of Janssen Pharmacutica. Water Street leveraged its years of experience in the pharmaceutical sector to work with management to accelerate OraPharma’s growth, and pursue attractive new product and market opportunities.

“OraPharma was already a strong business when we acquired it from Johnson & Johnson. Together with management, we created and implemented a strategic plan that further built on the company’s capabilities and advanced future opportunities for growth. We are pleased that the value we built in OraPharma led to one of the world’s leading specialty pharmaceutical companies investing in the company and its future,” said Pete Strothman, principal, Water Street.

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Valeant Pharmaceuticals to Buy OraPharma from Water Street

Valeant Pharmaceuticals International, Inc. (NYSE: VRX and TSX: VRX) announced today that Valeant has agreed to acquire OraPharma, a specialty oral health company that develops and commercializes products that improve and maintain oral health, from Water Street Healthcare Partners.

Total consideration is approximately $312 million and up to $114 million in potential contingent payments based on certain milestones, including revenue targets. OraPharma’s lead product is Arestin, a locally administered antibiotic for the treatment of periodontitis that utilizes an advanced controlled-release delivery system and is indicated for use in conjunction with scaling and root planing for the treatment of adult periodontitis. OraPharma currently has the largest specialized pharmaceutical salesforce in the dental industry and, as of March 31st, 2012, OraPharma’s trailing twelve month net revenue was approximately $95 million with the business growing at a high single digit rate. The transaction is expected to close in June 2012, subject to the satisfaction of certain closing conditions, and is expected to be accretive in 2012.

“We are excited to enter a new attractive market segment with an already established sales infrastructure focused entirely on the dental community,” said J. Michael Pearson, chairman and chief executive officer. “We believe that this market segment has similar characteristics to the dermatology, podiatry and ophthalmology markets and should offer us the opportunity to cross-sell some of our current products, most notably our new topical prescription cold sore medication, Xerese. We believe the OraPharma business is a new growth platform from which to build additional opportunities in the future.”

Valeant Pharmaceuticals International, Inc. (NYSE/TSX: VRX) is a multinational specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. More information about Valeant Pharmaceuticals International, Inc. can be found at www.valeant.com.

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Water Street Partners with Orthofix to Acquire Breg

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has closed a privately negotiated transaction to acquire Breg, Inc. from Orthofix International, N.V.

The transaction marks Water Street’s most recent partnership with an industry leader to expand its group of companies specializing in medical products, distribution, health care services, and pharmaceutical products and services.

Headquartered in Carlsbad, California, Breg designs and manufactures bracing products and cold therapy devices used for preventing and rehabilitating knee, shoulder, wrist, back and other orthopedic injuries. With the aging U.S. population, rising prevalence of chronic conditions, and the health care industry’s movement toward containing costs through non-surgical treatments, demand for these products is steadily increasing. Water Street plans to invest its industry expertise and resources to build Breg into a leading company specializing in non-surgical orthopedic products.

“Water Street stood out to our management team and to Orthofix as the ideal partner to accelerate Breg’s growth and expand our market position. Its team has years of experience leading and growing medical products companies, as well as a network of resources that will benefit Breg. I am excited about the opportunity to broaden Breg’s capabilities to offer our customers a more expansive portfolio of products and value-added services,” said Brad Lee, president, Breg.

Breg is Water Street’s fifth company specializing in medical products and the firm’s second investment in the rehabilitation industry. Earlier this month, Water Street sold Physiotherapy Associates, which it built into the nation’s foremost provider of outpatient rehabilitation services. Curt Selquist, an operating partner with Water Street who previously served as the company group chairman of Johnson & Johnson Medical, will serve as the lead director of Breg.

“Water Street has been seeking an investment in the orthopedic products market for some time. We identified Breg as the most attractive opportunity to build a market leader. It is highly regarded for bringing to market innovative, high quality products and services that advance orthopedic care. We will invest in research and development initiatives, and strategic acquisitions that will expand Breg to play a much greater role across the entire spectrum of orthopedic care,” said Mr. Selquist.

Founded in 1989, Breg offers cold therapy, knee, shoulder, spine, elbow/wrist, foot/ankle bracing and orthopedic practice solutions. The company’s products are sold through more than 100 distributors in 36 countries. Breg is based in Carlsbad, California with approximately 500 employees in the United States and Mexico. For more information, visit breg.com.

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PLUS Diagnostics Opens Southwest Lab

PLUS Diagnostics, a leading anatomic pathology company, opens a new laboratory in Houston, Texas this week, as part of the company’s continued national expansion.

The new facility offers customized diagnostic testing and consultative services to the gastroenterology and urology specialties, with plans to expand into dermatology and women’s health. It will serve physicians and medical specialists across the Southwest region.

The grand opening will be held May 10-11 at the new facility, located at 9150 S. Main Street - Suite C, Houston, TX. Dr. Adnan Savera, chief medical officer for PLUS Diagnostics and a nationally recognized pathologist, will open the new facility, along with the company’s employees.

“We are honored to join the Houston business community, and to extend our services to physicians and specialists throughout the Southwest region. We have designed this facility to provide our customers with state-of-the-art, high quality diagnostic services and technologies. We will continue to invest in expanding this lab and our other facilities to offer innovative services that are tailored to meet our customers’ unique needs,” said David P. Pauluzzi, chief executive officer and president, PLUS Diagnostics.

One of the newest services that PLUS Diagnostics will offer to physicians and surgery centers, is an exclusive molecular diagnostic assay from MDx Health, called Confirm MDx. This new assay is designed to address false-negative biopsy concerns of men undergoing prostate cancer diagnosis and treatment.

PLUS Diagnostics’ Houston laboratory is the third facility the company has built in the past three years to support rising demand for its services. In 2009, the company opened a facility in Union, New Jersey and its first West Coast lab in Irvine, California, tripling its overall laboratory capacity. Since partnering with Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, PLUS Diagnostics has grown its customer base and increased its net revenues more than 500 percent.

PLUS Diagnostics is a leading national pathology company that provides a full range of multi-specialty services, including extensive diagnostic procedures and specialist consultations. Accredited by the College of American Pathologists, PLUS Diagnostics has long been recognized for exceptional service and quality. The company currently focuses on a broad base of specialty pathology services, including urology, gastroenterology and hematology/oncology. PLUS Diagnostics is a company of Water Street Healthcare Partners.

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Water Street Divests Physiotherapy Associates

Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry, announced today that it has completed the sale of Physiotherapy Associates to Court Square Capital Partners.

Headquartered in Exton, Pennsylvania, Physiotherapy Associates is the nation’s foremost provider of outpatient rehabilitation services.

Water Street partnered with Stryker Corporation (NYSE: SYK) to acquire Physiotherapy Associates in 2007. Four weeks later, the firm merged Physiotherapy Associates with Benchmark Medical to transform the company into an industry leader. Water Street recruited a senior management team and has further expanded the company’s leadership position through a combination of strategic initiatives and targeted acquisitions.

“I am excited that the long-term value we created in Physiotherapy Associates has led to this new opportunity for the company’s future,” said Dan Connors, chairman, Physiotherapy Associates. “Together with Water Street, we executed a strategic plan that capitalized on the size and scale of two companies to transform Physiotherapy Associates into a national leader that is highly regarded for providing patients with outstanding clinical expertise and personalized care.”

Andrew DeVoe, chief executive officer of Physiotherapy Associates, added: “Water Street’s industry expertise and investment were critical to building Physiotherapy Associates into the high-performing national leader we are today. I am pleased that our success resulted in attracting a high-quality owner that is committed to further enhancing the care and services we offer to patients across the country.”

Physiotherapy Associates is the nation’s foremost provider of outpatient rehabilitation services. Physiotherapy Associates employs an industry-leading team of physical therapists and health care practitioners who are dedicated to high-quality patient care. The company provides physical therapy, industrial rehabilitation and orthotics and prosthetics services to thousands of patients across the United States. With more than 650 clinics, Physiotherapy Associates is national in scope, local in care. For more information, visit physiocorp.com.

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Water Street to Acquire Orthofix Business

Orthofix International N.V., (NASDAQ:OFIX) announced today that it entered into a definitive agreement under which Water Street Healthcare Partners will acquire Orthofix’s Sports Medicine Business Unit, which operates as Breg, Inc.

The purchase price is $157.5 million and is payable in cash at closing, which is expected to occur during the second fiscal quarter of 2012. Net proceeds to Orthofix from the sale are anticipated to be approximately $140 million, which will be used for the prepayment of debt as required by Orthofix’s existing credit agreement.

The Company acquired its Sports Medicine business in 2003 with the purchase of Breg, which is headquartered in Carlsbad, CA. The Sports Medicine business provides a portfolio of bracing and cold therapy products to treat a variety of sports medicine related conditions.

“With the divestiture of the Sports Medicine business, we are now able to devote Orthofix’s full resources and attention to strengthening our value proposition around our repair hardware and regenerative biologics and stimulation solutions,” said Robert Vaters, president and chief executive officer. "We believe this deleveraging event and resulting borrowing capacity will allow us to expand and enhance both our Spine and Orthopedic business units in a way that accelerates our ability to create shareholder value.”

“We are pleased that Orthofix has entrusted Water Street to grow Breg. We see tremendous opportunity to build on Breg’s leadership position and create greater long-term value in the organization. We will leverage our team’s deep medical products knowledge, extensive operating experience and network of relationships to strategically expand Breg’s innovative products and global presence,” said Chris Sweeney, partner, Water Street.

Upon closing, the Company will file the required pro forma financial results reflecting the disposition following the consummation of the sale transaction with the Securities and Exchange Commission, including any impact of pre-closing liabilities the Company will retain. J.P. Morgan Securities LLC provided a fairness opinion to the board of directors related to the transaction.

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AAIPharma Opens Technology Center

AAIPharma Services Corp., a leading provider of product-development services for the pharmaceutical industry, has opened a 40,000 square foot, state-of-the-art technology center on its Wilmington, N.C., headquarters campus as part of a $15 million capital expansion program.

The center creates a platform for expansion and the company anticipates adding scientific, technical and manufacturing jobs at AAIPharma, as well as new capital to the local economy.

“We’ve designed this world-class technology center as an adaptable laboratory concept that gives us the flexibility to meet our clients’ increasingly diverse needs,” said Patrick Walsh, CEO of AAIPharma. “We remain committed to investing in our employees, infrastructure and our region as we project continued and sustainable business growth.”

The technology center was designed with flexible work stations to meet the changing requirements of an expanding and increasingly broad customer base for developing and testing pharmaceutical and biopharmaceutical products. The center, which houses analytical, microbiology, preformulation and mass spectrometry experts, also received an infusion of new UPLC, HPLC, GC-MS, and LC-MS-MS systems to complement its existing array of laboratory resources. Project documentation will become virtually paperless with the rollout of an electronic laboratory notebook system. This further maximizes internal analytical processes and provides clients real-time accessibility to their project deliverables, which few contract pharmaceutical-development companies have achieved.

The company expects all Wilmington laboratory operations to be consolidated into the new location by June and also plans to expand its manufacturing centers in Charleston, S.C., and Wilmington, N.C.

AAIPharma Services Corp. is a leading provider of contract services that encompass the entire process of pharmaceutical drug development from discovery through commercialization. The company’s wide array of capabilities includes analytical chemistry, formulation development, material testing services, microbiology, and clinical and commercial contract manufacturing and packaging. AAIPharma Services serves more than 500 clients around the globe. It is headquartered in Wilmington, N.C.

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Water Street Signs Agreement to Sell Physiotherapy Associates

Water Street Healthcare Partners announced today that it has signed a definitive agreement to sell Physiotherapy Associates to Court Square Capital Partners.

Water Street announced the agreement after growing and establishing Physiotherapy Associates as one of the nation’s foremost providers of outpatient rehabilitation services. Headquartered in Exton, Pennsylvania, Physiotherapy Associates provides physical therapy, industrial rehabilitation, and orthotic and prosthetic services to thousands of patients across the United States.

Water Street acquired Physiotherapy Associates from Stryker Corporation in 2007. Shortly thereafter, it merged the company with Benchmark Medical to transform Physiotherapy Associates into a national leader in outpatient rehabilitation services. Since then, Water Street has invested its industry expertise and network of resources to further expand the company's leadership position through a combination of strategic acquisitions and organic growth initiatives.

“Physiotherapy Associates is another strong example of the long-term value Water Street creates through our corporate partnership strategy,” said Rob Womsley, partner, Water Street. “When we invested in Physiotherapy Associates, it was a non-core business of a large public corporation. We recruited a highly talented management team led by Dan Connors and Andrew DeVoe. Together with Dan and Andrew, we systematically executed a strategic growth plan that transformed Physiotherapy Associates into the nation’s foremost provider of high quality rehabilitation services.”

Terms of the agreement are not being disclosed.

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New Century Health Appoints CEO

New Century Health announced today that its board of directors has appointed Atul Dhir, M.D., Ph.D., chief executive officer.

Dr. Dhir will spearhead the national expansion of New Century Health’s specialty care management services focused on oncology and cardiology.  Water Street Healthcare Partners, a strategic private equity firm focused exclusively on health care that invested in New Century Health last year, recruited Dr. Dhir to the position.

Dr. Dhir joins New Century Health from his position as CEO of BiPar Sciences, Inc., a Sanofi-aventis biotech subsidiary that develops new cancer drugs.  He previously served as a senior executive with US Oncology, the largest provider of cancer care in the United States.  During his 10 years with the company, Dr. Dhir led several businesses, including the company’s Cancer Research Group, one of the nation’s leading cancer drug development companies.  Dr. Dhir has also held senior positions in the health care division of Monsanto Company and at McKinsey & Company.

“Dr. Dhir possesses a rare combination of deep scientific expertise and years of operational experience. He has an impressive 20-year history of leading and growing highly specialized health care businesses focused on transforming care,” said Steve Cosler, chairman of New Century Health and an operating partner with Water Street.  “Dr. Dhir clearly stood out as the leader best suited to building on New Century’s strong foundation to expand its services to payers and providers across the country.”

Dr. Dhir has advised numerous health care organizations and currently serves on the advisory boards of several health care companies.  He completed his doctorate of philosophy in molecular biology from the University of Oxford, where he studied as a Rhodes Scholar.  He received his medical degree from the All India Institute of Medical Sciences in New Delhi, India.

“My career has been dedicated to leading innovative organizations that are committed to improving health care on a large scale.  New Century Health has a unique and collaborative approach to improving the quality of patient care, while reducing the administrative work and overall costs of medical care in cancer, cardiology and other specialties.  I am excited to lead and grow the company to deliver these urgently needed services to patients, payers and providers across the country,” said Dr. Dhir.

Dr. Dhir assumes the CEO position immediately.

About New Century Health

New Century Health is a national specialty care management company that provides innovative technology and clinical solutions to enhance the quality of patient care, while reducing the administrative work and improving the cost efficiency associated with the delivery of care.  Its customers include both payers and doctors providing specialty care services to members of Medicare, Medicaid and commercial payers. New Century Health is a company of Water Street, a strategic private equity firm focused exclusively on health care. New Century Health is an official licensee of the NCCN Drugs & Biologics CompendiumTM. To learn more about New Century Health, visit www.NewCenturyHealth.com.

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AAIPharma Services Completes Acquisition to Expand Services

AAIPharma Services Corp. (“AAIPharma”), a leading provider of pharmaceutical product development services, announced today it has acquired Celsis Analytical Services, a division of Celsis International Ltd. that performs material testing services for the pharmaceutical, biotechnology and manufacturing sectors.

“The addition of Celsis Analytical Services will enable AAIPharma to expand its market presence in two key regions. Our combined company will bring a differentiated offering to the contract services market with an integrated development and material testing service model,” said Patrick Walsh, CEO of AAIPharma. “We are excited to integrate Celsis labs’ business with AAIPharma, creating one of the largest and most experienced materials testing businesses in the U.S.”

Celsis Analytical Services provides cost-effective, outsourced cGMP-certified laboratory services with industry-leading sample turnaround times at its laboratory operations in Edison, N.J. and St. Louis. Both testing centers, comprising 65,000 square feet of laboratory facilities, will be additive to AAIPharma’s existing 300,000 square feet of facilities. The combined entity offers a comprehensive menu of methods validation and testing services for biotechnology, pharmaceutical and consumer products manufacturers, raw materials suppliers and manufacturers of agricultural and veterinary medicine products.

“Celsis Analytical Services and AAIPharma have very complementary client bases and can provide a comprehensive range of testing services to the growing pharmaceutical and biotechnology outsourcing market,” said Jay LeCoque, CEO of Celsis International Ltd. “This acquisition will enable each of the locations to participate more fully in the growth of the contract services market and to enjoy the synergies offered by the larger combined company.”

“The material testing market is highly fragmented,” added Walsh. “AAIPharma is responding to our diverse customer groups’ growing preference to consolidate their outsourced services with fewer vendors. We recognize the opportunity to provide high quality, responsive and scalable services, and this acquisition is an example of our making substantial capital investments in equipment, facilities and capabilities.”

Terms of the deal were not disclosed. In 2009, AAIPharma was acquired by Water Street Healthcare Partners, a strategic private equity firm focused exclusively on the health care industry.  Water Street has invested in the company to expand its capabilities and services to customers.

Brown Gibbons Lang & Company represented Celsis International Ltd. in the transaction. 

About AAIPharma Services Corporation

AAIPharma Services Corp. is a leading provider of contract services that encompass the entire process of pharmaceutical drug development from discovery through commercialization. The company’s wide array of capabilities includes analytical chemistry, formulation development, material testing services, microbiology, and clinical and commercial contract manufacturing and packaging. AAIPharma Services serves more than 300 clients around the globe. It is headquartered in Wilmington, North Carolina. For more information on the company, visit www.aaipharma.com.

About Celsis International Ltd.

Celsis International Ltd. is a leading global provider of innovative life science products and laboratory services to the pharmaceutical and consumer products industries. For more information on the company, visit www.celsis.com.

 

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