April 23, 2012 3:23 PM

Covington Takes Lead on Pair of Health Care Deals as Sector Stays Hot

Posted by Sara Randazzo

Covington & Burling is advising on two health care industry deals announced Monday, representing Thomson Reuters in the sale of its health care unit to a Veritas Capital affiliate for $1.25 billion in cash, and providing outside counsel to AstraZeneca in its $1.26 billion cash acquisition of Ardea Biosciences.

Working opposite Covington in the transactions are Sullivan & Cromwell, for Veritas, and Paul Hastings, for Ardea.

In the Thomson Reuters deal, which is expected to close in the next few months, the affiliate of private equity firm Veritas is acquiring a division that provides data and analytics to hospitals, health systems, health plans, and others in the industry. The New York Times notes that the deal will free up cash for Thomson Reuters, which has seen a 30 percent drop in its stock price over the past year.

New York-based Covington partner J. D. Weinberg is the firm's lead advising Thomson Reuters on the matter, assisted by intellectual property partner Lee Tiedrich, technology transactions partner Nigel Howard, finance partner David Rosinus, antitrust partners Thomas Barnett and Miranda Cole, employee benefits partner Michael Francese, tax partner Robert Heller, insurance partner Marialuisa Gallozzi, real estate partner Robert Gage, government contracts partner Alan Pemberton, and regulatory partners Peter Flanagan, Michael Labson, and Donald Ridings.

Thomson Reuters in-house lawyers working on the matter include associate general counsel Marc Gold and Carolyn Blankenship and counsel Mark Irving and Gina Sarracino.

The New York-based Sullivan & Cromwell team advising Veritas, working with Veritas in-house counsel Christian Mittweg, is led by corporate partner Scott Miller and includes tax partner David Spitzer and finance partner John Estes.

In the second deal, London-based pharmaceutical company AstraZeneca has agreed to buy San Diego–based Ardea, whose focus in on developing small-molecule therapeutics for the treatment of serious diseases. AstraZeneca is paying $32 per Ardea share, a 54 percent premium over the target company's closing price on Friday. Ardea's most advanced product to date is a drug in development for the treatment of gout, according to a company release announcing the deal.

The Covington team advising AstraZeneca in the matter is led by corporate partner Catherine Dargan, who is working with corporate partner Stephen Infante, life sciences partners John Hurvitz and Emily Leonard, tax partner Robert Heller, benefits partner Francese, insurance partner Gallozzi, intellectual property partner Andrea Reister, regulatory partner Michael Labson, and antitrust partners Deborah Garza and James Dean.

Paul Hastings global M&A chair and partner Carl Sanchez is leading the Ardea deal team, which also includes antitrust partner Scott Hataway and tax partner Alexander Lee.

The two transactions, along with Pfizer's announcement that it has agreed to sell its infant nutrition unit to Nestle for $11.9 billion, continue a recent surge in health care sector deal activity. Calling it "a hot time for health care," the Times partially attributes the uptick in transactions to drugmakers' constant need to improve and expand their offerings.

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