The Health Care M&A Monthly: Third Quarter M&A Results--

215 Deals Posted Worth $65.9 Billion


Based on preliminary data, the health care industry posted a total of 215 mergers and acquisitions in the third quarter of 2010. A total of $65.9 billion was committed to fund this activity. Despite a lower level in deal volume, health care M&A remained relatively robust throughout the quarter.   

The 215 figure represents an 8% decline from the 233 deals announced in the previous quarter and a 10% decline from the 239 deals in the year-ago quarter, Q3:09. The four sectors of the medical technology segment announced 112 deals, or 52% of the quarter’s total deal volume. The nine sectors of the services segment accounted for the remaining 103 deals, or 48% of the total.

Taken together, the top three sectors in terms of deal volume, Medical Devices with 40, Biotechnology with 32 and e-Health with 22, accounted for 44% of the quarter’s deal volume. At the other end of the spectrum were Managed Care with seven deals, Behavioral Health Care with two and Rehabilitation with just one. The contribution of each sector to overall deal volume appears in the table on page 3, and is compared to the levels in the previous and year-ago quarters.

As noted, a total of $65.9 billion was committed to fund the third quarter’s M&A activity. This amount represents a 46% increase over the $45.1 billion spent in the previous quarter, Q2:10, as well as a 73% increase over the $38.2 billion spent in the year-ago quarter, Q3:09. The technology segment captured $43.4 billion, or two-thirds of the total amount, with the services segment accounting for the remaining one-third. The percentage contribution of each sector to the quarter’s total amount appears in the chart on page 16. Note that the results for five services sectors had to be aggregated since their individual returns were so meager. The third quarter produced a total of 13 billion-dollar deals, at a pace of one a week, totaling $43.7 billion, or two-thirds of the quarter’s total amount.

These numbers need to be read in context. The total figure for the Hospital sector, $6.5 billion, includes two large, overseas deals which would normally be omitted from our domestic figures: Khazanah’s $3.3 billion acquisition of Singapore’s Parkway Holdings (SI: PARM) and The Carlyle Group’s $1.7 billion purchase of Australia’s Healthscope Ltd. (ASX: HSP)... Want to read more? Click here for a free trial and download the current issue today