FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
Phone: 800-248-1668
Fax: 203-846-8300
pressreleases@levinassociates.com
TECHNOLOGY DEALS DOMINATE SECOND QUARTER HEALTH CARE M&A MARKET According to Irving Levin Associates, Inc.
NEW CANAAN, CT – July 25, 2001 – The health care technology segment captured 92% of total dollars spent on health care mergers and acquisitions during second quarter 2001, compared to the previous quarter’s 75% share, reports Irving Levin Associates, Inc. According to The Health Care M&A Report, the dollar value of deals announced in all health care sectors during the second quarter 2001 totaled $24.4 billion. Health care services transactions accounted for only about $2 billion, or 8% of that total.
Rising 3% from the previous quarter, a total number of 210 health care deals were announced during second quarter 2001. Of those deals, 54% were made in nine health care services sectors; 46% were made in four health care technology sectors.
The Health Care M&A Market
Second Quarter 2001 Deal Volume By Sector
Sector
Q2:01
Deals*
Q1:01
Deals
%Change
Q2:00
Deals
%Change
Services:
Hospitals
18
22
-18%
28
-36%
Laboratories
17
23
+26%
13
+31%
Managed Care
14
7
+100%
8
+75%
Home Health
11
5
+120%
8
+38%
Long-Term Care
10
9
+11%
13
-23%
Physician Medical Groups
9
16
-44%
21
-57%
Behavioral Health
5
4
+25%
15
-67%
Rehabilitation
4
5
-20%
4
0%
Other
26
25
+4%
24
+8%
Services Subtotal
114
116
-2%
134
-15%
Technology:
Medical Devices
29
42
-31%
e-Health
26
22
+18%
Biotechnology
21
11
+91%
Pharmaceuticals
20
12
+67%
Technology Subtotal
96
87
+6%
Grand Total
210
203
+3%
*Preliminary figures
A combined total of 80% of all health care M&A dollars expended this quarter was absorbed by two sectors: Pharmaceuticals saw 20 deals totaling $10.1 billion while Medical Devices saw 29 deals totaling $9.5 billion.
Of total health care M&A dollars expended this quarter, 9% was spent in Biotechnology. The E-health segment plus all the service sectors accounted for a combined total of 10.5% of total dollars expended. “We expect the Pharmaceutical and Medical Device sectors to dominate the health care M&A market for the remainder of 2001 in terms of dollar value of deals. Health care services will pick up in 2002 with some larger transactions as more capital begins to flow in those sectors,” stated Stephen M. Monroe, managing editor at the firm.
Health care services sectors saw a total of 114 deals, with $637 million spent on Managed Care deals and $401 million spent on Hospital deals. “The hospital sector is performing better than the numbers suggest at first glance; the $401 million figure omits several mergers to which no price was assigned. The rural hospital market is particularly active,” stated Sanford Steever, editor of the report.
The Post-acute sectors, suffering from changes in reimbursement, saw little of the total dollars expended, with Home Health receiving 0.4% of total health care dollars expended and Rehabilitation even less. Activity among Physician Medical Groups accounted for 0.1% of total health care M&A dollars, and the Long-Term Care sector, still lacking in capital for deals to be made, received 0.3% of those dollars.
Full details on second quarter health care M&A activity are published by Irving Levin Associates, Inc., in The Health Care M&A Report. The New Canaan, Connecticut-based research and publishing firm, with over 50 years of experience in the health care acquisition market, specializes in health care investments. To purchase the quarterly Health Care M&A Report, or subscribe to the weekly Health Care M&A Information Service, please call 1-800-248-1668.
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