The Health Care M&A Monthly: May’s M&A Activity Strong 72 Deals Announced Worth $28.4 Billion

The month of May saw the announcement of 72 mergers and acquisitions in the 13 sectors of the health care industry. The four sectors of the health care technology segment accounted for 38 of those transactions, or 53% of the total, while the nine sectors of the health care services segment produced the remaining 34 deals.
In terms of deal volume, the Biotechnology, Medical Device and Pharmaceutical sectors tied for first place with each sector announcing 12 transactions. These three combined represent half of the month’s deal volume.
In the services segment, Hospitals reported the highest deal volume, with six transactions, and was followed by Long-Term Care with five and Managed Care with four. By contrast, post-acute care service sectors languished, with Home Health Care producing just one deal and Rehabilitation none.
Based on prices revealed to date, a total of $28.4 billion was committed to fund this robust M&A activity. By itself, the technology segment accounted for $23.5 billion, or 83% of the month’s total dollar volume. Deals in the services segment, by contrast, accounted for the remaining $4.9 billion. May produced a total of six billion-dollar deals, with three in Medical Devices and one each in Biotechnology, Pharmaceuticals and Laboratory Services (in "Other"). Their combined value is approximately $23.8 billion.
Seven of this month’s transactions were carried out by financial buyers, including private equity firms. Although they account for just 10% of the deal volume, they represent $8.3 billion, or nearly 30% of the dollar volume.
The first five months of 2007 have produced a total of 365 mergers and acquisitions in the health care industry worth a combined total of $125.0 billion. If the market can sustain this galloping pace, 2007 will end up in the history books with nearly 900 deals worth a record-shattering $300.0 billion.