The Health Care M&A Monthly: January’s Health Care M&A Market--

Seventy-One Deals Announced Worth $73.6 Billion

The merger and acquisition market in the health care industry for January 2009 posted a total of 71 deals, with transactions announced in each of the 13 sectors of the industry that we cover. Out of this amount, 43 deals, or 60% of the month’s total, were in the health care technology segment, with the remaining 28 deals in the corresponding services segment.

With 16 deals, Biotechnology had the highest deal volume of any single sector, followed by Medical Devices with 14 and Pharmaceuticals with 10. The two most sluggish sectors were Rehabilitation with two deals and Managed Care with one.
For comparison sake, January 2008 posted a total of 71 deals, out of which the technology segment accounted for 43 deals and the services segment 28. The 2008 results are thus identical to those in 2009.

Based on prices revealed so far, a total of approximately $73.6 billion was committed to finance January’s M&A activity. Of that amount, $68.0 billion, or 92% of the month’s total dollar figure, is due to a single transaction, Pfizer’s proposed acquisition of Wyeth. This mega-deal naturally skews our figures towards the Pharmaceutical sector and the technology segment. The health care services segment proved comparatively lackluster, with just under $440.6 million committed to M&A activity in nine sectors. See the tables on pages 3 and 12 of the February issue of The Health Care M&A Monthly for the contribution of each sector to the market.

When compared with 2008 results, the raw dollar figures for 2009 indicate a giant leap: only $9.0 billion last year as against $73.6 billion this year. But if we factored out the $68.0 billion mega-deal, the remaining $5.6 billion would represent a decline against the amount paid in 2008. However, we expect these wrinkles ultimately to be ironed out when we consider quarterly then annual comparisons.