FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
Phone: 800-248-1668
Fax: 203-846-8300
pressreleases@levinassociates.com
HEALTH CARE M&A VOLUME RISES IN SERVICES SECTORS, FALLS OFF IN TECHNOLOGY SECTORS According to Irving Levin Associates, Inc.
NEW CANAAN, CT – April 12, 2001 – With 184 deals announced in the first quarter of 2001, overall merger and acquisition activity in the health care industry declined by 23% from the 238 deals announced in the previous quarter. Deal volume among the nine health care services sectors increased by 15%, but fell by 23% in the four health care technology sectors, according to Irving Levin Associates, Inc., a research and health care publishing firm. Even so, in its first quarter 2001 Health Care M&A Report (www.healthcaremanda.com), the firm reports that the technology segment continued to account for 75% of the total $20.8 billion spent in these deals, virtually level with the 74% of the $28.6 billion spent in the fourth quarter of 2000.
The Health Care M&A Market
First Quarter 2001 Deal Volume By Sector
Sector
Q1:01
Deals*
Q4:00
Deals
%Change
Q1:00
Deals
%Change
Services:
Hospitals
21
20
+5%
21
0%
Laboratories
18
14
+29%
16
+13%
Physician Medical Groups
15
8
+88%
20
-25%
Long-Term Care
8
7
+14%
13
-38%
Home Health
7
2
+250%
7
0%
Managed Care
7
13
-46%
16
-56%
Behavioral Health
3
6
-50%
7
-57%
Rehabilitation
3
2
+50%
1
+200%
Other
23
19
+21%
22
+5%
Services Subtotal
105
91
+15%
123
-15%
Technology:
Medical Devices
40
41
-2%
e-Health
18
45
-60%
Biotechnology
11
34
-68%
Pharmaceuticals
10
27
-63%
Technology Subtotal
79
147
-46%
Grand Total
184
238
-23%
*Preliminary figures
“Health care technology continues to capture the lion’s share of interest in the investment community,” noted Stephen M. Monroe, a partner and managing editor at the firm. “With 40 deals announced for the quarter, the Medical Device sector posted nearly twice as many transactions as the second-place Hospital sector,” Mr. Monroe added. Moreover, of the first quarter’s total dollar value of $20.8 billion for all the deals announced, the Pharmaceutical sector alone accounted for $14.2 billion, or 68% of the total.
Deals in the services segment may now be regaining some momentum. “While the post-acute and ancillary sectors continue to languish, certain core sectors are registering significant activity. Deals by pharmacy benefit managers, hospital operators and practice management organizations accounted for $4.6 billion of the first quarter’s M&A activity,” stated Sanford B. Steever, editor of the report.
Irving Levin Associates, Inc. is a New Canaan, Connecticut-based research and publishing firm specializing in health care investments. The firm has over 50 years of experience in the health care acquisition market. To purchase The Health Care M&A Report, consisting of four quarterly reports, 12 monthly newsletters and 50 weekly bulletins, please call 1-800-248-1668.
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