The Health Care M&A Monthly: Health Care M&A Results from the Third Quarter of 2006

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Based on preliminary figures, a total of 237 mergers and acquisitions
were announced in the health care industry during the third quarter of 2006. The nine sectors of the health care services segment accounted for 136 deals, or 57% of the quarter’s total deal volume, while the four sectors of the health care technology segment accounted for the remaining 101 transactions.
The most prolific sectors in terms of deal volume include Long-Term Care with 38 deals, Medical Devices with 34 and Pharmaceuticals with 27. These three sectors combined attracted 42% of the deal volume. The contribution of individual sectors to the quarter’s deal volume, as well as comparisons with the previous and the year-ago quarters, appear in the table on page 3.
A combined total of $74.4 billion was committed to finance the third quarter’s M&A activity. Those funds were divided equally between the services ($38.3 billion, 51%) and technology ($36.1 billion, 49%) segments. The Hospital sector posted the largest amount of any single sector, $33.5 billion, while Biotechnology and Pharmaceuticals tied for second place with $16.0 billion apiece. The percentage contribution of each sector to the quarter’s dollar volume appears in the chart on page 4. The quarter posted seven billion-dollar deals, worth a combined total of $62.4 billion. One of them, the $33 billion deal to privatize HCA (NYSE: HCA), accounted for more than half of that amount.
Year-to-date, the health care M&A market has seen 746 deals, worth a combined total of $185.0 billion. A total of 24 billion-dollar deals have been announced, at the torrid rate of better than one every other week.
 

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